Western immigration curbs to affect remittances

Migration of the workforce from India to various countries has increased since the mid-1990s, making the Indian diaspora the largest in the world. This has also resulted in the rise of remittances back to India, making it one of the highest recipients. The recent changes in immigration policies in Canada and potential changes in the USA are likely to affect India, especially the states from where emigration is taking place in large numbers. These states include Kerala, Gujarat, Punjab and Andhra Pradesh.

In India’s remarkable economic performance, the role of liberation, privatisation and globalisation (1991) is mentioned by many economists and global institutions. In this endeavour, the economic policy changes were accompanied by realignment of India’s relationship with G7 countries. This was extended through India’s effective participation in the G20 meetings. This has enabled India to attract a large amount of foreign capital, along with a high rate of domestic savings and investment. At the G20 meeting in Delhi last year, it was decided to build a rail link to Europe through Middle East countries as an alternative to China’s Belt and Road Initiative.

A large number of educated Indian skilled and semi-skilled workers have also found jobs abroad. These developments have given a fillip to the Indian diaspora’s expanding numbers, making it the largest and highest contributor to domestic remittances in the world in recent years. This has happened due to a balance in the economic policy and country’s international engagements.

The number of Indian immigrants has risen from 79 lakh in 2000 to 189 lakh in 2023. Indian immigrants send remittances back home, raising consumption standards of their families, as well as investment in housing and businesses. Their contribution to India’s foreign exchange earnings is notable.

The largest number of Indian immigrants are in the USA (44.60 lakh). The combined number of immigrants from the four close US allies is 86.49 lakh — Australia (4.96 lakh), Canada (16.89 lakh), New Zealand (2.40 lakh) and UK (17.64 lakh). This number rises to 189 lakh if immigrants to Europe are added.

Another region which has a large Indian presence is the Middle East countries. The UAE, Saudi Arabia, Oman, Kuwait and Qatar have 85.77 lakh Indian immigrants.

There is a major difference in the immigration policy of these two regions. The Western countries allow the immigrants to settle permanently and grant them citizenship. The Gulf countries do not allow this. This makes Western countries the most preferred destination for immigrants. The USA and its four close allies accounted for more than 35 per cent of the remittances received by India in 2023. The USA alone contributed 23 per cent followed by UK (6.8 per cent), Canada (2.4 per cent), Australia (1.9 per cent) and New Zealand (less than one per cent) of India’s total $120 billion remittances. The combined contribution of Western countries (including Europe) is slightly more than that from Gulf countries, whose share in Indian remittances stands at 42 per cent of the total.

These two regions contribute more than 85 per cent of total Indian remittances, which help the country meet massive foreign trade deficits. State-wise data of remittances shows that Kerala tops the list, followed by Maharashtra, Karnataka and Tamil Nadu.

Despite a large number of immigrants to various countries, Punjab still lags behind these states. This is due to the fact that Punjabi emigrants are largely concentrated in the UK, Canada, the USA, Australia and other countries where they have settled permanently, and over time the flow of remittances has declined. Immigrants from Kerala are mostly based in the UAE and other Arab countries where they cannot settle permanently. This has ensured a high flow of remittances back home.

Emigration to other countries has helped India in reducing the burden of unemployment among the educated and the skilled workforce. India’s immigrants are not only a source of massive foreign exchange earnings but also promote Indian culture and goodwill abroad. They also create a demand for traditional goods abroad.

After the adoption of the liberalisation policy in 1991, India has increasingly depended on other economies for its domestic needs and for unloading surplus goods and services abroad, besides sending its trained workforce abroad. This is the reason that changes in immigration policies of Western countries affect it seriously.

There have been recent changes in Canada’s immigration policy such as dispensing with multiple-entry visitor visa. Another significant change is about the provision of granting permanent residence (PR). Earlier, the students who had completed their degrees or diplomas could get temporary work permit and were given PR after some time. This provision has been tightened now and a very limited number of students will be able to get PR, provided they have skills in which Canada is facing acute shortage among its own citizens.

Last year, the Canadian government had doubled the requirement for foreign students with advanced deposit of living expenses as a condition for admission in academic institutions. The changes in PR rules and visa policy have created a threat for a large number of foreign students, including Indians, of being forced to leave Canada after completing their education.

Canada has been a preferred destination for students and workers from Punjab, Haryana and Himachal Pradesh. The number of Indian students in Canada in 2023 was 4.27 lakh, out which 1.47 lakh (41 per cent) were from Punjab. Besides, there are a large number of young Punjabis who have temporary residence permits that are on the verge of expiry. More than 1.5 lakh of them are facing the threat of deportation. Many of them have been holding demonstrations across Canada to highlight their problems. But no one is paying any attention to their woes.

The recent US election has brought Donald Trump back in power. He is committed to ‘America First’ and may tighten immigration policies. The signs of similar change are visible in other Western countries as well. This has serious implications for the Indian diaspora and remittances being sent to India.

There is an urgent need to protect the future of Indian students in Canada who have gone there with aspirations to settle permanently. If a large number of them are forced to return to Punjab, it will be a huge problem. The Punjab Government needs to take up this matter with the Centre on an urgent basis for a viable solution.