Notwithstanding expectations, the issue of more skilled Indians getting access to the US through more liberal assessment of H1B visa requirements did not make much progress in the meeting between prime minister Narendra Modi and US president Donald Trump. The difficulty of moving forward on this understandable as any move deemed progress by one side would be considered concession by the other making the latter politically unacceptable. As one of the world’s largest sources of young skilled labour, India would continue to look at the US as one of the best markets for its talented people. While new regulations curbing ‘misuse’ of H1B visas would undoubtedly squeeze mobility for some categories of Indian professionals, for India, the bigger concern is over the global labour market becoming more non-global as more and more countries take to greater control of foreign workers and skilled professionals.
Since the inception of the WTO, movement of natural persons has been at the forefront of global, regional and bilateral trade discussions. Movement of temporary, skilled service providers has always been a contentious matter. Apart from concerns over local jobs being grabbed by foreigners, cross-border labour mobility has been affected by inability of national regulatory authorities to agree on mutual recognition of qualifications. As a result, it has been difficult even for nurses and language teachers to cross borders for taking up foreign occupations despite many countries suffering from lack of trained nurses and teachers. It has been relatively easier for IT and finance professionals as they often move as intra-corporate transferees within same organisations working out of different locations.
India has been a major supplier of both moderately skilled workers for satisfying temporary shortages in domestic labour markets as well as more high-skilled professionals that are part of a global pool of elite talent owned held by major corporates. This is discernible from the difference in the skill profiles of its migrants to the Gulf and to the US and Europe. From an Indian perspective, it is essential to ensure that all qualities of skills, both moderate and high, continue to move beyond its borders. As a country adding more than ten million youth annually to its labour force, creating sufficient jobs at home becomes a herculean proposition making it vital that skilled Indians keep moving to jobs.
For several years, particularly during the 1990s and early 2000, India was relatively undisturbed with movement of skilled professionals. High-skilled Indians could move rather easily to the US and other industrial markets as global companies considered them key actors in expanding business through technology-led productivity growth. IT and finance complemented each other in this respect as the sun shone brightly on Indian professionals who made good hay. The relatively low-skilled migration also continued well, mostly to the Gulf that provided multiple opportunities to Indians as the Arab countries kept on ploughing profits in infrastructure and allied services.
Migration prospects also arose in Africa and Latin America from commodity booms that produced ample merchant activities creating new needs like demand for English language teachers and technical trainers in countries new to global business templates. Matters became very different since the financial crisis of 2008 that, apart from other consequences, encouraged closer scrutiny of national ‘benefits’ from economic globalisation. As banks went bust and indebted households stared at commercial papers with empty promises, anger focused on those that appeared to have benefitted at the expense of those affected.
Foreign workers were easy targets as national labour markets began efforts to become less global than what was politically acceptable. National governments too begun realising that macroeconomic gains generated by many corporates were significantly due to the talent that they had, which was largely foreign, and therefore politically difficult to defend to domestic interests. Thus began contraction, starting from gradual hikes in foreign worker levies and higher social security contribution from corporates, to greater scrutiny of temporary work visas and steady freeze on foreign hiring for several sectors.
Matters weren’t helped by structural changes in the world economy like depression in global crude oil prices following shale gas finds and rapid growth in artificial intelligence that put brakes from the supply side on available jobs. India is hard pressed for solutions at the current juncture. It is struggling hard to discover policy choices given the difficulties in creating jobs at home and enabling movement of its people overseas. Tough postures like complaining to the WTO on the restrictions the US has been gradually introducing on H1B visas have not helped.
Hard bargaining at regional trade negotiations like the RCEP by trading off tariffs with labour mobility have also been ineffective. And geopolitical developments like Arab states isolating Qatar that has generated uncertainties for thousands of migrant Indian workers in the country are compounding problems. It is also evident that notwithstanding geopolitical convergences and strong ties on defence and security, US won’t budge on labour mobility and H1B visas.
One possible option for India could be to work with countries in Africa and Asia on bilateral labour mobility frameworks. It’s good to work with countries that look up to India as a reliable supplier of affordable skills. In most of Africa, and several parts of Asia, India enjoys substantive goodwill on its human resources and technical capacity. Locking on to specific skill needs of these countries would be a relatively stable and assured path to ensuring labour mobility rather than struggling to obtain concessions from US and other advanced markets that are handicapped by adverse domestic sentiments.