Govt backing more international MoUs on skilled labour migration amid shortage concerns raised by industry

L&T CFO said that he was not very sure as to how we will meet all our aspirations with Indian labor.

The central government is keen on signing more international MoUs for mutual recognition of skill qualifications to ease the mobility of professionals to international markets.

"We are working on framework for mutual recognition of skills and qualifications. We have a task force on international migration of workers. Very soon there is a meeting of the task force and we will be moving ahead from there on possibly some more bilateral agreements where we can work towards mutual recognition of the skills and qualification," Labour Secretary Sumita Dawra told Moneycontrol in an interview on August 9.

She added that countries like Germany are facing a labour deficit and are encouraging foreign skilled workers to come to the country.

"We have a demographic dividend, and it's not necessary that everybody will work within the country," Dawra said.

The labour secretary's comments come at a time when major infrastructure companies like Larsen & Toubro have said that India is losing a large portion of its skilled labor to infrastructure projects that are being executed in the Middle East.

"Markets like Middle East which are investing lot of money in infrastructure development, there is so many Indians working there," L&T's Chief Financial Officer R Shankar Raman had said on July 24.

Engineering and construction companies have been struggling to meet their skilled labour requirements for a while, but the magnitude of the issue was driven home by industry leader L&T when it revealed on June 26 that it faces a staggering deficit of 25,000 to 30,000 labourers across the group.

The Engineering, Procurement, and Construction (EPC) industry plays a critical part in taking India's economy towards the $5 trillion mark, and the shortage of skilled workers raises concerns about the pace of execution of infrastructure projects.

Industry players say that the construction sector never fully recovered from the exodus of migrant workers during  Covid; many didn’t return, and those who did were not equipped with the required skill sets.

India’s construction sector is the second largest employment generator and as of December 2023, 71 million people were estimated to be employed in the sector. However, 81 percent of this workforce is unskilled, according to a report from consulting firm Knight Frank, published in August 2023.

Extreme weather conditions such as heatwaves, especially in north India this year, further aggravated the situation. Executives also pointed out that workers who travelled to their hometown for the elections didn't return to the cities.