Intro: The move reflects Moscow’s growing reliance on foreign labour as demographic pressures and workforce gaps continue to strain its economy.
New Delhi
As Russia looks to address acute labour shortages across several sectors, a new report has indicated that at least 40,000 Indian citizens are expected to travel to Russia this year for employment.
The move reflects Moscow’s growing reliance on foreign labour as demographic pressures and workforce gaps continue to strain its economy.
According to a report published on DW’s website, between 70,000 and 80,000 Indian citizens were already working in Russia by the end of last year. The number is expected to rise significantly following the signing of two bilateral agreements between India and Russia in December. These agreements aim to boost the mobility of Indian semi-skilled and skilled workers.
The two pacts, titled Temporary Labour Activity of Citizens of One State in the Territory of the Other State and Cooperation in Combating Irregular Migration, are designed to create a formal framework for employment while protecting workers from exploitation. The agreements are expected to prevent a repeat of past incidents in which Indian workers reportedly fell victim to recruitment fraud and misleading job promises.
Public attention has recently focused on the case of a young Indian software professional who was found working on the streets of Russia, highlighting the risks faced by migrant workers. He was among 17 Indian nationals who had arrived in St. Petersburg several months ago to help address labour shortages in municipal road maintenance. According to a report by Fontanka, the workers were recruited by a Russian road maintenance company, Kolomyazhskoye, and assigned to street-cleaning and winter road maintenance duties.
Labour shortages in several parts of Russia have reportedly increased demand for migrant workers, particularly in manual labour, construction, and municipal services. Analysts say the trend is likely to continue as Russia struggles to fill vacancies domestically. Meanwhile, India’s Commerce and Industry Minister Piyush Goyal has highlighted the strength of India’s entrepreneurial and workforce ecosystem.
Key factors driving reliance on foreign labour
Russia is experiencing a severe labour shortage, with estimates indicating a deficit of approximately 2.2 to 2.6 million workers in 2024–2025, a gap projected to exceed 3 million by 2030
* Wartime economic strain: The shift toward a defense-focused economy has created immense demand for labor in manufacturing and, to a lesser extent, construction, which the domestic market cannot satisfy.
* Declining migrant influx: Following tighter immigration policies, including restrictions on workers from Central Asia in certain regions, Russia is diversifying its search for labor.
* Strategic Shift to South Asia: To fill these gaps, Russia is actively courting workers from India, with plans to recruit up to 1 million, alongside workers from Myanmar, Nepal, and Vietnam.
* Record-low unemployment: Unemployment has dropped to a historic low (approximately 2.1%–2.7%), meaning almost all available, qualified, and willing residents are already employed.
Economic consequences & measures
* Wage inflation: The scarcity of workers has led to rapid wage growth, which is contributing to inflationary pressures.
* Industrial bottlenecks: Industries like metallurgy and defense, particularly in the Ural region, are struggling to meet production demands due to the lack of personnel.
* Alternative labour sources: Companies are increasingly forced to turn to teenagers, retirees, and inmates to fill positions.