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Understanding the Impact of Migration on Innovation

Table of Contents


Body of the Essay.

The Unemployment Problem..



Introduction to The Impact of Immigration on Economy

This essay discusses the issue of immigration and its positive and negative impacts on the land. The COVID-19 pandemic has locked down people inside their houses but the immigrants do not have a proper house. Additionally, the economic activities have become sluggish and international trade has come to a standstill. All these factors accentuate the problem of the immigrants in the foreign land they are residing. The essay discusses all the aspects that interlink immigration economics to provide a clearer picture of the recent situation.

India is a developing economy and also the second most populous country in India. The influx of immigrants contributes to population explosion on one hand. However, the fact that cheap labour is easily available due to immigration cannot be ruled out. Again, land is a scarce resource and hence is expensive for people looking for land for residential purposes. The essay tries to do a critical analysis whether immigration is good or bad for a country, setting practical constraints like scarcity of land, socio-economic disparity, and unemployment.

Body of The Impact of Immigration on Economy

Chronology of Immigration in India

India is a country of diverse culture. Since its birth during the Indus Valley Civilization the country has been home to dynasties and ethnic groups from foreign lands (Singh, 2016). During the ancient times the issue of immigration was not a problem as the native population was lesser in the country. With changing times dealing with immigrants have become a national concern due to many reasons like: lack of land for accommodation, employment opportunities, etc.

In the ancient ties, the motive of immigration was to set us trade bases among countries. With the advent of the British Rule, emigration replaced immigration to a larger extent as India emerged as the supplier of cheap labour for the world (Johnson and Rodger, 2015). The immigrant population in India at present comprises of economically weak and socially backward populace from the neighboring countries, at large.

Present data clarifies two things: firstly, India has twelfth largest immigration population in the world and secondly, emigration rate of India is as low as 1%. As recorded in 2015, out of India’s total population of 1.31 billion, more than 5 million were immigrants. The International Migrant Stock Report, 2019, released by the UNESCO has marked India as the country with the largest population of immigration, comprising of 6.4% of global immigrants (United Nations Population Division | Department of Economic and Social Affairs, 2020). The immigrants were mostly from Bangladesh, Pakistan, Nepal and Sri Lanka. While the positive impact of immigration has been increase in labour in India, the negative impact has been the increase in the number of illegal migrants in the country. Illegal migrants are the immigrants who do not follow the legal procedure to enter India and also do not abide by the required documentation for permanent residence in the country (Bureau Of Immigration, 2020).

Immigration Laws in India

  1. Constitutional Provision: Article 10 of Part III of the India Constitution deals with grant of Indian Citizenship to foreigners residing within the geographical territory of the country (Stelian and Oana Madalina, 2018). As per this provision a foreigner can either acquire Indian citizenship by naturalization or by registration. In India, the provision of acquiring citizenship by naturalization can be applicable to foreigners only after residing for at least fourteen years. The immigrants can also acquire Indian Citizenship by registering themselves at the Foreigners Regional Registration Office.
  2. The Passport (Entry in India) Act, 1920: The Act mandates the possession of passport by any foreigner entering India via land, air or water transport. Passport is a legal document issued by the domestic country of the foreigner to travel to foreign lands. This Act however does not define any scrutiny provision for validating the authenticity of passports issued to the foreigners. This is a prime reason that of late many immigrants have been able to enter India through fake passports (Schenk, 2013).
  3. The Foreigners Act, 1946: This Act outlays the provision of ‘burden of proof’ on the individual for validating the fact that he or she has followed legal provisions to enter and stay in India. The Central Government has enacted tribunals and conferred powers of a civil court on them to take penalty actions on individuals who do not abide by this Act. It is to be noted here that majority of immigrants in India belong to the socially and economically backward segments with no basic level education (Jensen, 2014). Most of them are unaware of the legalities and the penalties derived for not following the law. This Act does not address the issue of documentation of these people, which is the first and the foremost task.

Effect on the Economy

One of the positive effects of immigration in an economy is increased supply of labor. With increasing demand for goods, the production requirement increases for which more labour is required (Gunadi, 2019). Also an enlarged labour base reduces the cost of labour which and the producer is able to achieve cost minimization easily. The immigrants are largely constituted in the urban areas compared to the rural areas. The pull factors like employment opportunities and better living standards are the major drivers of increased immigrant population in the urban areas. This has on the other side resulted to problems like crowded cities, sanitation problems, hunger, deprivation and exploitation of the immigrants. The immigrants in India are mostly refugee immigrants who are hopeful that they will receive social and economic recognition within the secular and demographic structure of the nation.

Another impact of immigration is that it brings down the productivity of labour (Issac, 2013). The skill-set of the immigrants may not match up the requirements of the job prospects available in India. This depends on various factors like different educational curriculum in countries, separate level of vocational training across countries, nature of the work environment and work culture at offices in different countries, etc. Language is another big problem for immigrants which obstructs their social amalgamation at the office in the foreign country they are residing in. All these factors are responsible for bringing down labour productivity of the immigrant workforce (Chassamboulli and Palivos, 2014).

In the rural areas of India agriculture and allied activities are still a dominant occupation. Indian farmers and agriculturists have a fair knowledge of the climate, nature of rainfall, sowing time and reaping time of the crops, the quality of seeds, etc. The immigrant labourers, who are available for lower costs can look attractive for the producer. But their availability does not guarantee their productivity. This means that if the producer choses the immigrant labourers over Indian labourers for minimizing cost, the productive Indian labourers will migrate to a better job and any unforeseen situation in farming would be difficult to be addressed with the limited knowledge of the immigrant farmers.

Scarcity of Land

Land is used for five reasons: constructing houses, agriculture, developing industries, as a means of transportation and for recreational purposes. The use of land for one purpose creates an opportunity cost for the other purposes. The reason behind this is there is too little land to accommodate too many people. India is house to about 15% of the global population but has only 2.4% of the global land within its territory. India is the second most populous country in the world but comparatively not enough land is available to accommodate the huge Indian populace.

The outbreak of the COVID-19 pandemic has led to lockdown in India, like many countries and in such a scenario managing the immigrant workers become a tough task. The lockdown created has rendered them jobless and also homeless as they are yet to receive the citizenship of the nation. Due to scarcity of land, it has become almost impossible to set up camps with proper accommodation and sanitation facilities for the labourers to survive amidst the pandemic. Being a scarce resource land is becoming expensive day by day and giving the economic condition of the immigrants and no job security it is getting out of their reach.

The COVID-19 outbreak was preceded by demonstrations and agitations relating to CAB and NRC in India. This factor had already created a gap of dissent among communities in the country by the time lockdown had taken over (Schenk, 2013). The Constitutional Amendment Bill had proposed to grant Indian citizen to religious minorities from Pakistan, Afghanistan and Bangladesh while the National Register of Citizens (NRC) Act would create a list of all the illegal immigrants living in India irrespective of religion. The issue of CAB was unwelcomed by majority of the Indian on the ground of scarcity of land available for residential purposes.

The Unemployment Problem

The unemployment problem resulting from immigration is found in refugee migrants. Refugee migrants are generally ethnic groups that have travelled to India in search of better living conditions owing to deprivation in their own country. A large influx of the refugee migrants in India occurred during the 1970s following the Bangladesh Liberation War. Domestic residents of a country find it hard to trust foreigners to employ in different job roles. In India this scenario is prevalent in the workers employed in the unorganized sectors. Domestic helps, who belong to a different country are often eyed with suspicion by their masters and treated in a bad manner. The absence of strict law for securing the dignity and income of such workers in India is one off the major reasons for their exploitation (Gunadi, 2019).

However, the immigrant workers in the organized sector do not face such socio-economic disparity in India. Central Government schemes like ‘Make in India’ have opened avenues for the entry of people from foreign lands and use the labour base of India to produce their goods. This is a solution to simultaneously address the issue of unemployment and growth in India. In the organized labour market the entry of foreign entrepreneurs and workers are perceived as boon for the organization. The exchange of ideas and skills lead to the growth of the company and the country as a whole (). This is also applicable for India where there are many Multi-National Corporations (MNCs) in operation.

Conclusion on The Impact of Immigration on Economy

The aim of the essay was to understand the impact of immigration on economic status of a nation. Thee example of India has helped with the availability of natural constraints like scarcity of land, unemployment, socio-economic disparity and inequality. The facts and the theories discussed in the essay highlight three major points. Firstly, immigration will lead to crowding in the cities due to scarcity of land. Secondly, lack of proper accommodation will lead to inadequate sanitation, increase in the number of accidents and increase the number of criminal and beggary syndicates in the cities. Thirdly, immigration will lead to disguised unemployment as productive labour will move to better job options. Fourthly, the issue of unemployment will worsen given rise to more crimes in the country. Lastly, the immigrant labourers should be brought within the ambit of organized labour market to save them from exploitation by their employers.

References for The Impact of Immigration on Economy

Books and Journals

Chassamboulli, A. and Palivos, T., 2014. A Search-Equilibrium Approach To The Effects Of Immigration On Labor Market Outcomes. International Economic Review, 55(1), pp.111-129.

Gunadi, C., 2019. An inquiry on the impact of highly-skilled STEM immigration on the U.S. economy. Labour Economics, 61(2), p.101751.

Issac, J., 2013. Economics Of Migration. Taylor & Francis.

Jensen, P., 2014. Understanding the Impact of Migration on Innovation. Australian Economic Review, 47(2), pp.240-250.

Johnson, C. and Rodger, S., 2015. Did Perception of the Economy Affect Attitudes to Immigration at the 2010 British General Election?*. Social Science Quarterly, 96(5), pp.1214-1225.

Schenk, C., 2013. Controlling Immigration Manually: Lessons from Moscow (Russia). Europe-Asia Studies, 65(7), pp.1444-1465.

Singh, M., 2016. From India to Israel: Identity, Immigration, and the Struggle for Religious Equality by Joseph HodesJoseph Hodes. From India to Israel: Identity, Immigration, and the Struggle for Religious Equality. McGill-Queen's University Press. xviii, 210. $24.95. University of Toronto Quarterly, 85(3), pp.473-475.

Stelian, S. and Oana Madalina, P., 2018. International Migration: The Analysis of Economic Impact in the Globalization Context. Economic Computation And Economic Cybernetics Studies And Research, 52(4/2018), pp.79-94.


Boi.gov.in. 2020. Bureau Of Immigration. [online] Available at: <https://boi.gov.in/> [Accessed 16 August 2020].

Un.org. 2020. United Nations Population Division | Department Of Economic And Social Affairs. [online] Available at: <https://www.un.org/en/development/desa/population/migration/data/estimates2/estimates19.asp> [Accessed 16 August 2020].

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