Russia Looks to India and Sri Lanka to Ease Deepening Labour Shortage

Russia is facing one of the most acute labour shortages in its recent history, driven by a combination of demographic decline, an ageing population and the prolonged impact of the Ukraine conflict. After decades of depending largely on migrant workers from Central Asia, the country is now widening its recruitment net to include populous South Asian nations such as India and Sri Lanka in an effort to sustain economic activity.

According to official estimates, Russia will require nearly 11 million additional workers by the end of this decade to meet the demands of its economy. The seriousness of the issue has pushed labour mobility to the forefront of diplomatic discussions. During Russian President Vladimir Putin’s visit to India in December, both sides signed an agreement aimed at simplifying procedures for temporary labour migration, signalling a growing institutional push to facilitate the movement of Indian workers to Russia.

Sharp Rise in Indian Workers

Data from Russian authorities indicate a significant increase in the number of Indian nationals working in the country. Employment permits issued to Indians rose dramatically from around 5,000 in 2021 to more than 56,000 last year. Overall, Russia granted over 240,000 work permits to foreign nationals in 2025, the highest figure recorded in at least eight years.

While migrants from former Soviet republics such as Turkmenistan continue to arrive, much of the recent growth in foreign labour has come from countries farther afield, including India, Bangladesh, Sri Lanka and China. Labour market experts describe this as a structural shift, reflecting both changing demographics and evolving migration policies.

Filling Gaps Across Sectors

Workers from India and other South Asian nations are increasingly visible in a wide range of roles across Russian cities. Municipal services such as snow clearing and sanitation are now employing foreign workers, alongside construction projects, restaurants, hotels and other urban services.

With unemployment hovering around 2%, among the lowest levels globally, Russia’s domestic workforce is insufficient to meet demand. Economists warn that without sustained inflows of foreign labour, the country risks facing constraints on productivity and economic growth, which is already under pressure.

A Long-Term Demographic Challenge

Russia’s labour crisis is closely tied to long-term demographic trends. A sharp fall in birth rates following the collapse of the Soviet Union in the 1990s has resulted in a shrinking pool of young workers today. Nearly one-quarter of the population is now at or approaching retirement age, intensifying the strain on the labour market.

Demographers caution that this is not a temporary imbalance. The proportion of young people is expected to continue declining for decades, making foreign labour an increasingly important component of Russia’s workforce strategy.

Impact of War and Migration Policies

The conflict in Ukraine has further worsened labour shortages. Large numbers of working-age citizens have been absorbed into defence-related industries, while many others have left the country to avoid mobilisation or due to political uncertainty. At the same time, Russia has tightened regulations on visa-free migration following security concerns in recent years, reducing inflows from some traditional source countries.

As a result, employers are showing a preference for workers who enter under formal visa arrangements and fixed contracts. Such workers are seen as more stable and less likely to frequently change jobs compared to migrants from visa-free regions.

Training and Language Support

To meet employer requirements, recruitment agencies have begun investing in training infrastructure outside Russia. In India, specialised centres now provide skill-based training in areas such as welding, construction and electrical work. Candidates are assessed and certified before deployment.

Language training has also gained importance. For service sector roles, particularly in hospitality, basic Russian language courses are being offered to improve workplace communication. In sectors like construction, bilingual supervisors often act as intermediaries between management and workers.

Cost and Industry Pressures

From an employer’s perspective, hiring workers from South Asia can also be cost-effective. Industry estimates suggest that skilled workers from countries like India may accept wages lower than those typically offered to local employees for similar roles, without compromising on skill levels.

Labour shortages are already affecting major Russian industries. Mining, shipbuilding and heavy manufacturing firms have reported operating below capacity due to a lack of skilled personnel. Company representatives have acknowledged that workforce constraints remain one of the most significant challenges facing industrial output.

Looking Ahead

Analysts believe Russia’s reliance on foreign labour is likely to increase rather than diminish in the coming years. With population ageing set to continue and domestic labour supply remaining limited, international recruitment appears to be a structural necessity rather than a short-term solution.

For countries like India and Sri Lanka, this trend presents opportunities for overseas employment, provided adequate safeguards are in place to protect workers’ rights, wages and working conditions. The evolving labour relationship also highlights a broader global shift, where demographic realities and geopolitical factors are reshaping migration patterns and economic dependencies.

As Russia adapts to this new labour landscape, its growing engagement with South Asian nations underscores how workforce mobility is becoming a central element of modern economic strategy.