Expatriate workers buoy economies of five Indian states. Politicians must stop ignoring them |
India is in election mode. In several states, manifestos have been released, rallies are drawing large crowds and candidates are making promises on healthcare, infrastructure, employment, and education. The democratic machinery is working exactly as it should.
Yet not a single major party manifesto in Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, or Maharashtra contains a serious plan for the 18 million Indians working abroad. These are the workers whose remittances quietly underwrite state economies, fund household consumption and keep regional banks liquid.
In every practical economic sense, they are among the most consequential constituents any state government has. Because they cannot vote from abroad, they have been written out of the political conversation entirely.
For years this exclusion has been an inconvenient oversight. Now it is becoming a liability.
The Gulf is not stable
Iran and Israel have moved beyond proxy conflict and are exchanging ballistic missiles and drones directly. The situation remains unresolved. The Strait of Hormuz through which roughly 20% of the world’s oil and 30% of its liquefied natural gas passes is a live flashpoint.
Tanker insurance premiums are climbing, port operations across Gulf states have faced intermittent disruption, and the mood among employers is cautious. In the Gulf, such caution tends to translate quickly into contract cancellations and job losses.
For five Indian states, this is not a foreign policy concern. It is a slow fiscal emergency.
According to the Reserve Bank of India’s latest remittance survey, India received $118.7 billion in remittances in 2023-’24, with Gulf countries contributing the single largest share.
Maharashtra leads state-wise at 20.5% of national inflows, followed by Kerala at 19.7%, Tamil Nadu at 10.4%, Telangana at 8.1% and Karnataka at 7.7%. Together, these five states account for nearly two-thirds of total inflows.
They are precisely the states where political parties are now competing hardest for votes – and not saying much about this risk.
Five states, one blind spot
The exposure is real but uneven. Maharashtra’s remittance base draws significantly from the US and UK, which provides a partial cushion against a Gulf-specific shock. Tamil Nadu, Andhra Pradesh, Telangana and Karnataka have a much deeper blue-collar Gulf dependency, with workers concentrated in construction, manufacturing, and hospitality – the sectors that contract first when the regional economy slows.
Tamil Nadu’s workers are among the most numerous on Gulf construction sites. A prolonged disruption would not only force their return but also stall construction activity at home: Tamil Nadu is itself a major destination for migrant workers from Bihar, Bengal, and Odisha. A Gulf shock would pass through the state economy twice.
In Andhra Pradesh and Telangana, Telugu-speaking workers have received over 7.5 lakh emigration clearances in a single decade. Their remittances have funded homes, educated children and seeded small businesses across coastal Andhra and Telangana’s smaller districts.
Neither state has a rehabilitation framework for these workers, and neither manifesto acknowledges that one is needed.
Karnataka’s vulnerability runs through real estate. Remittance-backed housing investment has been central to Bengaluru’s construction boom. A Gulf disruption would surface first in stalled projects, then in builder defaults, then in non-performing loans spreading through the banking system.
Kerala: The most exposed
Among all Indian states, Kerala’s dependence on the Gulf has no parallel. Its annual remittance inflow – exceeding Rs 2 lakh crore – is larger than the state’s own tax revenue of Rs 1.25 lakh crore. Every month, approximately Rs 16,665 crore arrives from abroad, accounting for 23.2% of Kerala’s net domestic product.
As of early 2025, NRI deposits in Kerala’s banks stood at Rs 2,93,622 crore.
The Kerala Migration Survey 2023 puts the number of Malayalis in the Gulf at approximately 17.7 lakh. Return migration has been rising steadily – from 12 lakh returnees in 2018 to 18 lakh by 2023. Over the same period, unemployment in the state climbed from 9% to 12.5%.
The Nitaqat policy of Saudi Arabia and the Emiratisation drive in the United Arab Emirates to encourage local workers have already reduced long-term prospects for expatriate labourers. A war-driven mass return would land on a state that is already struggling to absorb those who came back from the last disruption.
India had a preview of what mass Gulf return looks like in 2020, when Covid forced hundreds of thousands of workers home. The system absorbed it, narrowly, and most eventually went back. War is a different kind of disruption. Recovery takes years, not months. Jobs that disappear in a conflict do not return when a ceasefire is signed.
What is needed is not complicated. A Gulf Risk Reserve Fund, built through a modest cess on NRI deposits across the five most exposed states, would create a buffer. Emergency returnee reception infrastructure at major airports needs to exist before a crisis, not be improvised during one.
Collateral-free rehabilitation loans and targeted skilling programmes – redirecting experienced Gulf workers toward Germany, Canada, Australia, and the UK, all of which are actively recruiting – would convert a potential crisis into a managed transition.
None of this has appeared in any manifesto.
India’s political class has decided, by default, that workers who cannot vote from abroad do not need to be planned for. Several state economies may yet pay a steep price for that decision.
KT Abdurabb is a Gulf-based writer and social commentator.