Branching out: The economic potential of South Asians abroad

Across South Asia, the search for better job opportunities is leading millions beyond national borders and will continue to do so into the foreseeable future. By 2030, the number of people aged 15 years or older in the region will grow by 22 million people per year—and many will be looking for jobs, especially good jobs. Over the past decade, South Asia has only been able to create 19 million jobs per year. Until job creation picks up sharply within the region, South Asians will continue to seek opportunities abroad.

Today, international migrants from South Asia make up about 3 percent of the region’s working-age population. This diaspora forms a dynamic and potentially transformative economic force. If supported by the right policies, South Asia’s diaspora can benefit the region’s economies in many more ways than sending money home—through improved skills, investments, and trade ties.

Mapping South Asian migration

About half of South Asian migrants live and work in Gulf Cooperation Council (GCC) countries such as Saudi Arabia, the United Arab Emirates, and Qatar. These migrants—especially from countries like Bangladesh, Nepal, and Pakistan—typically work in low-skilled occupations under short-term contracts.

In contrast, a quarter of the South Asian diaspora resides in advanced economies like the United Kingdom, Canada, and Australia. Migrants from India, Pakistan, and Sri Lanka are especially well-represented in these destinations. This group is generally more educated. For example, over 60 percent of South Asian migrants in the United Kingdom hold post-secondary qualifications—far higher than the averages in their home countries and higher than migrants from other developing countries.

The difference in destination often determines not only the nature of employment and length of stay, but also the kind of contribution migrants can make to their home economies.

_{Sources: Global Bilateral Migration Matrix 2000–2020 (database); World Development Indicators (database); World Bank.
Note: AEs = advanced economies; AFG = Afghanistan; BGD = Bangladesh; BTN = Bhutan; EMDEs = emerging market and developing economies; GCC = Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates); IND = India; LKA = Sri Lanka; MDV = Maldives; NPL = Nepal; PAK = Pakistan; SAR = South Asia Region. Migrant population from South Asia includes South Asian migrants in other South Asian countries. EMDE and South Asia aggregates exclude small states (population below 1.5 million). Migrants are defined as people born in a country that is different from the country where they currently reside. Numbers for Afghanistan include family refugees, including children who have not yet reached working age. People who were born in India and are living in Pakistan, and vice versa, are excluded from the migrant population, due to historical reason.
A. Red horizontal line is the median of other EMDEs. Shaded region represents the inter-quartile range of other EMDEs. EMDEs exclude small states (population below 1.5 million). Latest data are for 2020.
C.D. Numbers showing migrants aged at least 15 years old with tertiary education as a percent of all migrants who are at least 15 years old, by origin and destination country group.}

Beyond Remittances: A Broader Economic Role

For many South Asian economies, remittances are a lifeline. Between 2020 and 2023, remittances averaged 4 percent of GDP across the region. In Nepal, it was 24 percent. These funds help families meet basic needs, invest in education, and weather economic shocks. But remittances are just one way South Asian diasporas contribute to their home economies.

Migrants contribute to development in many other ways.

• Returning migrants bring back savings, skills, and global perspectives that go into entrepreneurship, local investment, and community development. Evidence from Bangladesh, for example, shows that returning workers often use their savings to start small businesses and increase household incomes.
• Diaspora networks serve as bridges to frontier knowledge and international markets. High-skilled migrants, particularly in technology and services sectors, can spur innovation and enable cross-border business partnerships, even without their permanent return to the home country. India’s vibrant tech industry owes much to this dynamic.
• Trade and investment ties often deepen between migrant-sending countries and host countries, as evidence from other countries has shown. U.S. states with large Vietnamese communities saw significantly faster growth in trade with Vietnam in the 1990s; FDI inflows in China in the 1970s were predominantly from high-income economies with large Chinese diasporas.

In short, migration is not just a one-way ticket to opportunity—it can be a two-way channel for growth and development. If supported by the right policies, migration can yield quadruple wins for the home country, the host country, migrants, as well as their families. 

The Need for Smarter Migration Policies

To unlock the full benefits of migration, governments need to take a more proactive and strategic approach. International experiences such as those shared during the recent South Asia Labor Mobility Conference, hosted in Bhutan, offer several lessons:

• Formal bilateral labor agreements can greatly improve outcomes for migrants. Skilling arrangements such as the Global Skill Partnerships complement these agreements and maximize benefits for all parties involved.
• Pre-departure training and support matter. Korea’s Employment Permit System, which includes skills training, health insurance, and legal protections, has served over 56,000 migrants annually, many from South Asia. With proper preparation and safeguards, even low-skilled migration can deliver long-term gains.
• Engagement with the diaspora helps. Policies that remove barriers to investment and trade and create platforms for knowledge exchange while diasporas are abroad, and encourage return migration can help translate brain drain into brain gain.
• Support to reintegration helps smooth the transition to domestic labor markets. Policies that support business incubation, credit access, and job placement—can amplify the impact of returnees. Removing regulatory obstacles to their return and improving business climates will help encourage returnees to bring entrepreneurial ambitions and capital back.

In the face of sluggish growth and limited job creation, tapping the full economic potential of South Asia diasporas abroad is more important than ever. By shifting the focus from short-term remittances to long-term partnerships, South Asia can turn migration into a source of resilience, prosperity, and shared opportunity. By shifting the focus from short-term remittances to long-term partnerships, South Asia can turn migration into a source of resilience, prosperity, and shared opportunity.