Services sector contributes over 50 per cent to India’s GDP. The sector has exhibited significant resilience, posting growth even during periods of crisis in the last two decades. The IT sector has been the backbone of the services revolution in the country.

The age dependency ratio of high-income countries has been steadily increasing and stands at almost 55 per cent.


What is the status worldwide?

  • The age dependency ratio in Japan has risen 26 per cent between 1990 and 2021 — with 70 per cent dependent on the 15-64 working age — the highest among high-income countries.
  • A similar increase of around 10 per cent has been seen amongst other developed countries as well, the most significant being Germany and France, with a dependency ratio of 56 per cent and 63 per cent, respectively.
  • The UK and the US, which have a significant Indian diaspora have also seen a rise, though a gradual one, with the dependency ratio of 57 per cent and 55 per cent in 2021.


How is it an opportunity for India?

  • These demographic challenges in the developed world offer an interesting opportunity for India where just 6.3 per cent of the male population and 7.3 per cent of the female population is above 65. The burgeoning population is often considered an economic dividend for India. There is a need to up-skill the working population to reap the potential.
  • All top Indian institutes across fields should design courses to leverage the opportunities offered by developed economies.
  • While most of the developed countries has a good social security system, their support system however will come under strain going ahead. This is an area India can explore by offering hospitality management in developed economies. India has a huge opportunity to cater to the space by deploying better allied health personnel. These could be doctors, nurses, and paramedical staff.


What should be done?

  • Recognising this opportunity in developed economies, the Centre should set up vocational training courses for young Indians on new languages, customs, and processes. Possible involvement of the embassies of these countries towards setting up these courses will help to further strengthen relationships between the two. Japan had a few years back signed an agreement under the Specified Skilled Workers (SSW) programme to onboard trained nurses from India.
  • States could draw from the success of the Kerala model that has sent abroad a significant number of skilled nurses. Kerala has launched an initiative to provide free European language training to tribal nursing professionals to help them migrate.
  • While technology-oriented services and allied healthcare facilities have the potential to play a significant role in India’s services exports and contribute to ageing economies in the developed world, there is an immediate need to upgrade the skills in both these areas.
  • Language could be a huge barrier that needs to be overcome. Integrated course work could be designed for a year, pursuant to which a certified degree could be awarded that is recognised overseas. Towards this end India needs to have a mutually recognised agreement (MRA) of such courses to incentivise Indians to tap job opportunities abroad.
  • Developed countries need to also support it for their benefit.
  • Lastly, while AI would require technology interventions and training, in the soft skills there is a huge opportunity abroad, which States must learn to tap.
  • It may be noted that India is the world’s largest recipient of remittances. In 2021, receipts stood at $87 billion.



Discovering opportunities in services sector beyond information technology would not only help earn foreign exchange for the country, but also facilitate economic diplomacy.


SourceThe Hindu Business Line


QUESTION – The developed world is facing an ageing problem scenario which presents a once-in-a-lifetime opportunity for India to reap it to its own advantage. Discuss how?