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Breaking down India’s migration story
For today’s story, we’re talking about migration . It’s one of the oldest stories of humanity—people moving from one place to another, searching for better opportunities. It’s also one of the most studied topics in social sciences. But migration isn’t just about maps or borders. It’s a complex, ever-changing phenomenon with so many layers—demographic, economic, social, legal, cultural, and more.
What makes someone pack up their life and start fresh somewhere else? Let’s explore migration through the lens of India—both within the country and across international borders—to better understand what it says about India and its economy.
To keep things simple and relevant, we’ll focus on migration from an economic perspective. People move for all sorts of reasons—jobs, education, business, or even marriage. But at its heart, migration is often about the labor market and is driven by two main forces: push factors and pull factors .
Push Factors : These are the reasons people leave their hometowns—things like a lack of jobs, low wages, or poor living conditions. For a long time, many people in rural India moved to cities because of low agricultural productivity and hidden unemployment. However, this trend seems to be shifting, but we’ll come back to that later.
Pull Factors : These are the reasons people move to a particular place—better job opportunities, higher wages, and the hope of a better life. In India, cities like Mumbai, Delhi, and Bengaluru have been magnets for migrants, just like the Gulf countries or the American continent attract international migrants.
Source: EACPM
Source: Indian Express
So, how are these push and pull factors playing out within India and internationally? Let’s break it down to understand the migration trends both at home and abroad.
Domestic Migration
Migration within India has seen an unexpected shift. According to the Economic Advisory Council to the Prime Minister (EAC-PM), rural-to-urban migration has dropped by 11.8% over the past decade. Back in 2011, there were around 45.6 crore migrants within the country. Today, that number is estimated to be about 40 crore. This means that while roughly 37.6% of India’s population were migrants in 2011, that percentage has now fallen to 28.8%.
What’s interesting is that this change happened while the country’s workforce grew by about 20% during the same period. This can only point to one thing—fewer people are moving for economic reasons. In 2011, around 4.5 crore people migrated for work. By 2023, that number has dropped to roughly 4 crore.
Source: The Hindu Business Line
When we look at the state-wise breakdown of migration trends, the results are pretty much as expected.
Just five states—Uttar Pradesh, Maharashtra, Andhra Pradesh, Bihar, and West Bengal—account for about 48% of all outbound migrants (including those moving within their own state). Similarly, five states—Maharashtra, Uttar Pradesh, Andhra Pradesh, West Bengal, and Tamil Nadu—make up roughly 48% of all inbound migrants (again, including within-state movements).
Now, why is this happening?
There could be two possibilities: either rural areas are improving significantly, or urban areas no longer seem as attractive as they once did. The Economic Advisory Council to the Prime Minister (EAC-PM) leans toward the first explanation. They suggest that better government services—like education, healthcare, infrastructure, and connectivity—along with improved economic opportunities in or near rural areas, are making people stay closer to home.
But not everyone agrees with this view. Some experts argue that it’s less about rural areas thriving and more about urban areas struggling. They say India’s urbanization is slowing, and economic growth has stagnated, making cities less appealing as engines of opportunity. Consider these points:
- Bank deposits in rural areas, often used as a proxy for remittances, are declining.
- Fewer people are buying unreserved train tickets, which is a common indicator of labor mobility.
- Major rural infrastructure projects, like electrification and housing, haven’t significantly improved livelihoods. For instance, India already had 86% electrification by 2001, yet migration rates were still high back then. Plus, new housing under PM-Awaas Yojana-Gramin has been slowing.
Instead, rural areas are seeing rising disguised unemployment and stagnant real wages. In short, domestic migration is in trouble because people simply don’t see a reason to move.
Now, let’s contrast this with the international picture. India stands out as the world’s largest source of migrant labor and the top receiver of remittances. In 2024, India brought in a record $129.1 billion in remittances—that’s a whopping 14.3% of all global remittances and more than double the amount received by the next country, Mexico.
While this year’s share is unusually high, India has consistently received more than 10% of the world’s remittances for most of the last 25 years. To put it simply, remittances are the money sent home by people working or living abroad to support their families or communities.
Source: World Migration Report
Source: The Hindu
Source: The Hindu
This comes down to Indians finding much better opportunities abroad. Indian migrants—whether they move to the UAE or the US—see a massive jump in income. For example, a low-skilled worker moving to the UAE can triple their income, while moving to the US could mean earning five times more.
Source: World Bank
Even on a relative scale, international migration makes a lot more financial sense for Indians. To put it in perspective, it would take India more than two decades of economic growth to reach the same income levels as many of the countries Indian migrants move to today.
Source: World Bank
But what about India? How does the country benefit from this?
While remittances contribute a record $129.1 billion, they only make up 3.3% of India’s GDP. At the same time, the country faces a significant brain drain as skilled workers leave.
Compare this to other countries where remittances play a much bigger role in their economies:
- In Tajikistan, remittances make up half of the country’s GDP.
- In Lebanon, where a large part of the population has moved abroad, remittances account for a quarter of the economy.
- Smaller Central American countries like Nicaragua and Guatemala also see remittances contribute about 25% of their GDP.
- Even Nepal, right next door, gets over 25% of its GDP from remittances—much of it from workers in India.
Source: The Hindu
In fact, remittances have become a bigger source of funds for South Asia than FDI and foreign aid put together!
Source: The Daily Guardian
In fact, remittances have become a bigger source of funds for South Asia than both foreign direct investment (FDI) and foreign aid combined!
However, remittances aren’t the only way migrants help their home economies. About 40% of all international migrants eventually return to their home country. When they do, they bring back higher earning potential, savings to invest in homes and assets, and often valuable knowledge and skills.
Take Indian expats in Silicon Valley, for example. Many of them returned to India and played a big role in nurturing the country’s IT industry. Back in 2006, nearly 90% of Bangalore’s IT firms were started by people who had returned from the US.
Even beyond direct contributions, the opportunities in places like the US motivated many Indians to pursue computer science and related fields. This helped create a deep talent pool, which in turn became a backbone for India’s thriving IT industry.
And that’s the state of migration in India. If we take a closer look, the push and pull factors show a clear contrast between domestic and international migration:
Push Factors:
- Domestically, migration is slowing because urban areas in India aren’t creating enough jobs.
- Internationally, the huge wage gap between India and countries like the UAE or the US continues to push people to move abroad.
Pull Factors:
- Urban centers in India are reaching their limits, offering fewer opportunities to attract migrants.
- On the other hand, countries like the UAE and the US still offer highly lucrative opportunities for Indian workers.
So, what does this tell us?
Domestic migration is declining, while international migration has hit record highs.
However, migration isn’t without its challenges:
- Exploitation and Discrimination: Many migrants face issues like wage theft, poor working conditions, and even xenophobia. Recent controversies around H1B visas, for example, highlight the difficult situations faced by Indian workers in the US.
- Social Costs: Migration can disrupt social harmony in host countries. In the US, debates over high-skilled visas have shown how migration can divide public opinion.
- Rural Brain Drain: Both domestic and international migration are draining rural areas of young, skilled workers, which creates long-term challenges for development.
Putting it all together, migration policies around the world are becoming stricter. Countries are reevaluating their immigration strategies due to political and economic pressures. But migration remains vital—it drives innovation, fills labor shortages, and strengthens global connections.
For India, as a key player in global migration, finding the right balance is crucial. Domestically, we need to revitalize our urban centers to attract more migrants. Internationally, we must protect our diaspora while tapping into their contributions to India’s growth.
Tidbits
- United Breweries has stopped supplying beer to the Telangana Beverages Corporation, citing losses due to outdated pricing and unpaid debts. The company, which contributes ₹4,500 crore annually to the state’s revenues, says it can’t continue operations unless it’s allowed to increase prices. A review panel is currently looking into their request, but in the meantime, the company’s stock has dropped by about 4%.
- India’s trade deficit for November 2024 has been revised down from $37.8 billion to $32.8 billion after a $5 billion error in gold import data was discovered. Apparently, some gold imports were mistakenly counted twice, and the correct figure is now $9.8 billion. This mistake highlights the need for better methods of reporting trade numbers. Even with the correction, India’s exports between April and November have grown by 7.6%, reaching $536 billion.
- BP Plc has partnered with ONGC to boost oil and gas production in the Mumbai High fields. Their goal is to increase crude oil output by 44% and natural gas production by 89% over the next ten years. This effort could help reverse the long-standing decline in production and reduce India’s dependence on imported energy, strengthening the country’s energy security.
-This edition of the newsletter was written by Kashish & Pranav
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