Russia Faces Deepening Labor Crisis, India Becomes Key Solution

New Delhi / Moscow: Russia is grappling with a severe labor crisis, one of the most alarming in decades, prompting the country to seek workers from highly populated nations beyond Central Asia. India has emerged as a key partner in addressing this shortage, leading to a significant increase in work permits for Indian nationals. Russia is also recruiting workers from Sri Lanka and China to fill the gap.

Decades-Long Demographic and War Pressures

The shortage stems from Russia’s demographic decline and the economic disruptions caused by the Ukraine war. Analysts estimate that the Russian economy will need an additional 11 million workers by the end of the decade. During President Vladimir Putin’s visit to New Delhi, agreements were signed to simplify temporary labor migration, paving the way for a surge in Indian work permits.

In 2025, Russia issued over 56,000 employment permits for Indian workers — a sharp rise from around 5,000 the previous year. This is part of a broader increase in foreign labor permits, which exceeded 240,000 in total — the highest since at least 2017. While permits also increased for ex-Soviet nations like Turkmenistan, the most substantial growth has come from India, Bangladesh, Sri Lanka, and China.

Indian and South Asian Workers Filling Critical Gaps

Indian and South Asian laborers are increasingly taking on essential roles in Russian cities, including municipal services such as snow removal, construction, restaurants, and other urban services. Elena Velyayeva, Operations Director at Russian recruitment agency Intrud, noted, “We are witnessing a tectonic shift in the Russian labor market.” Intrud, established two years ago to bring foreign workers to Russia, has set up a training center in Chennai, India, for welders destined for Russian projects. Candidates are trained and evaluated before deployment.

Other agencies are offering Russian language crash courses to prepare workers for hotels, construction, and other industries, often pairing them with bilingual supervisors to bridge communication gaps.

Economic and Strategic Implications

The shortage has significant economic implications. Russian companies, including MMC Norilsk Nickel, have reported workforce gaps of up to 10%, affecting operations in Siberia and beyond. Shipbuilding giant JSC Shipbuilding Corporation AK Bars is operating at roughly half capacity due to labor shortages. Hiring from Asia often proves more cost-effective, with skilled Indian electricians, for instance, earning 25% less than Russian recruiters would offer.

Russia is also leveraging its ties with North Korea to partially bridge the wage gap. Since 2022, there has been an uptick in foreign arrivals despite previous UN sanctions restricting overseas employment. By 2025, North Korean laborers alone were expected to number around 50,000 in Russian construction sites, according to RIA Novosti.

Chinese workers, meanwhile, are mainly employed in small and medium enterprises such as restaurants, logistics, and wholesale trade, often working in their own companies or joint ventures.

A Long-Term Demographic Challenge

Experts warn that Russia’s labor crisis is not temporary. Demographer Igor Efremov notes that Russia’s population will continue aging, with a declining share of youth and children. “This is a long-term structural reality that will persist for decades and requires significant economic adaptation,” he said.

With India stepping in as a critical partner, the surge in work permits and deployment of Indian workers could provide a partial solution to Russia’s labor gap — a crisis intensified by demographics, war, and a shrinking domestic workforce.