For more than half a century, migration has shaped Keralam's economy, society and aspirations. The Gulf boom transformed the state through remittances, while Malayali nurses opened doors to Europe and America. Today, a new generation is taking the education route to the West, often at considerable financial cost. But tightening immigration rules, uncertain job prospects and mounting student debt are threatening the overseas dream.
At the same time, Keralam is becoming increasingly dependent on workers from other Indian states to sustain its economy. Is the migration model that helped build modern Keralam now approaching a turning point? Here, we take a deep dive into the state's evolving migration dilemma.
How did Keralam's migration story begin?
Keralam's migration history predates the Gulf oil boom. Malayalis had travelled to Ceylon, Burma, Singapore, Malaysia and other parts of India in search of employment. Migration acquired an entirely different economic dimension with the development of the Gulf economies.
Prof K P Kannan, development economist and former director of the Centre for Development Studies (CDS), points out that while Keralam already had a tradition of outward migration, what distinguished the Gulf migration was the scale of employment opportunities and the remittances it generated.
How did the Gulf boom transform Keralam's economy?
In the 1960s, young Malayali men boarded wooden dhows and country boats to cross the Arabian Sea, often without passports, visas or any assurance of employment. Their destination was the Persian Gulf, where the discovery of oil was beginning to transform small trading settlements into thriving economies. Six decades later, their grandchildren are boarding flights to London, Toronto, Berlin and other Western cities, armed with university admission letters, education loans and dreams of settling abroad.
The journeys could hardly be more different. Yet the underlying motivation remains much the same: the search for opportunities that Keralam cannot adequately provide at home.
What has changed is the economics of migration. The earlier generation went abroad to earn money and send it home. Many of today's young migrants are spending family savings, borrowing heavily and mortgaging property to establish themselves overseas. Unlike their predecessors in the Gulf, who largely considered Keralam their permanent home, many hope to build their lives abroad.
The implications are significant. A state whose economy was transformed by remittances is witnessing a migration model in which substantial amounts of money flow out even before migrants begin earning.
During the 1960s, young men, particularly from Malabar, undertook perilous journeys across the Arabian Sea. Some travelled without proper documents, relying on informal networks to find work after reaching the Gulf.
The real transformation came after the 1973 oil crisis, when soaring petroleum revenues triggered a construction boom across Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain. These countries needed workers to build roads, ports, airports, hospitals, commercial complexes and residential buildings.
What drove Malayali migration to the Gulf, and how did it expand?
Keralam had precisely the workforce they required. With agriculture stagnating, industrial development limited and unemployment widespread, overseas employment offered an escape from economic uncertainty. Masons, carpenters, electricians, mechanics, drivers and shop workers began leaving in large numbers. Historical trading links between Malabar and West Asia, combined with networks established by early migrants, accelerated the movement.
From construction workers and technicians to engineers, doctors, nurses, accountants and entrepreneurs, Malayalis became deeply embedded in Gulf economies. Keralam-origin entrepreneurs also established major businesses in retail, healthcare and hospitality. M A Yusuff Ali's LuLu Group is among the most prominent examples.
How did Gulf migration and remittances reshape Keralam's economy?
The relationship worked both ways. Money earned in the Gulf returned to Keralam, financing houses, land purchases, education, healthcare and household spending.
Dr K J Joseph, director of the Gulati Institute of Finance and Taxation (GIFT), says remittances helped Keralam weather a prolonged period of economic stagnation when agriculture and industry offered limited opportunities for growth. Their impact extended beyond migrant households.
How did Malayali nurses open the doors to Europe?
While the Gulf construction boom was gathering momentum, another migration story was unfolding, led largely by young women from Central Travancore.
In the 1960s, West Germany faced a shortage of nurses and began recruiting women from overseas. Catholic Church networks played a crucial role in connecting German hospitals and institutions with young women in Keralam. Church leaders, priests and diocesan institutions helped identify candidates, communicate opportunities and facilitate recruitment. Some women underwent basic German-language training before leaving. An estimated 6,000 to 7,000 Malayali women migrated to West Germany during this period.
Researcher Dr Urmila Goel has documented this migration, examining the experiences of Indian nurses in West Germany and the intersections of gender, race and professional identity. For many women, nursing offered financial independence and opportunities unavailable at home. Their success established a pathway for subsequent generations.
Malayali nurses gradually expanded their presence across Europe, the UK, the US and other countries. Unlike the early Gulf migration, which was dominated by men in manual and semi-skilled employment, nursing migration demonstrated that Keralam's educated workforce could compete internationally. It also helped establish a lasting culture of overseas professional mobility, particularly among women.
How did overseas migration become a route for skilled professionals?
Doctors, engineers, IT professionals, academics and other skilled workers began exploring opportunities in Europe, North America and Australia. The changing educational profile of emigrants reflected this transition.
According to Kannan, the proportion of migrants with at least an undergraduate degree increased from around 10% in 1990 to more than 30% over the past decade. The motivations changed too. The first generation largely migrated because of unemployment and poverty. For many younger professionals, overseas migration became a means of pursuing better careers, higher salaries, professional recognition and improved living standards.
Why is the Gulf migration model facing uncertainty?
The Gulf remains Keralam's principal overseas employment destination, although its share of emigrants has declined.
Kannan estimates that West Asia accounts for around 87–88% of Keralam's overseas migrants, compared with about 90% earlier.
Gulf countries are increasingly prioritising employment opportunities for their own citizens. Saudi Arabia's Nitaqatprogramme and similar localisation policies elsewhere in the region have altered recruitment patterns, particularly in sectors traditionally employing expatriates. Companies face requirements to increase the proportion of nationals in their workforce, narrowing some opportunities for foreign workers.
The changes affect both blue-collar and white-collar employment, although their impact varies across countries and sectors. Economic uncertainty, recruitment restrictions and changing labour-market requirements have added to the pressure.
Official emigration clearance figures for Indian nurses also reportedly indicate a decline.
Why is student migration becoming a financial risk?
As overseas employment patterns change, education has emerged as an increasingly popular route abroad.
The Kerala Migration Survey (KMS) 2023 recorded approximately 2.5 lakh student emigrants, compared with 1,29,763 in 2018. Student emigrants now account for 11.3% of Keralam's emigrant population.
Young people are leaving at increasingly early ages, sometimes as young as 17. Canada, the UK, Australia, Germany, Ireland, Malta and other destinations attract Malayali students seeking foreign qualifications and eventual employment.
Why are families increasingly viewing foreign education as an investment?
For many families, the attraction extends beyond the degree itself. The prospect of securing a post-study work visa, finding employment and eventually obtaining permanent residency has become a powerful incentive. This has fuelled the rapid expansion of overseas education consultancies across Keralam, including in smaller towns. Families increasingly view foreign education as an investment in their children's future.
But the financial commitment can be substantial.
The situation becomes particularly precarious when post-study work visas approach expiry. Students unable to secure qualifying employment or another valid immigration route may have little option but to return home. For families that have borrowed heavily to finance their education, this can be financially devastating.
Canada, the UK and Australia have introduced restrictions affecting international students and post-study migration pathways in recent years. Anti-immigration sentiment and incidents of xenophobia have added to concerns about safety, social acceptance and long-term settlement.
How is overseas education debt affecting Keralam's banking sector?
The growing dependence on education loans is emerging as a significant concern for Keralam's banking sector.
Outstanding education loans extended by banks in Keralam increased from Rs 9,143.80 crore in December 2023 to Rs 11,441.78 crore in December 2025, according to the figures supplied. This represents an increase of approximately 25% in two years.
The position was already worrying in December 2024, when outstanding education loans stood at Rs 9,387.11 crore across 2,57,669 accounts. Of this, Rs 880.74 crore had become non-performing assets (NPAs), representing 9.38% of the outstanding portfolio.
These figures indicate considerable repayment stress, although not all education loans are for overseas studies. For families that have pledged property or exhausted their savings to send children abroad, failure to secure employment can create prolonged financial difficulties. The burden can be particularly severe when students return without sufficient earnings to repay their loans.
Could the changing migration pattern affect Keralam's remittance economy?
The traditional Gulf migrant frequently maintained strong financial commitments to Keralam, investing in houses, land and family welfare. By contrast, migrants seeking permanent settlement in Western countries may increasingly direct their savings towards housing, education, retirement and family expenses abroad.
This does not mean that migrants settling overseas stop sending money home. Nevertheless, if permanent settlement becomes more common, the long-term pattern of remittances and household investment could change.
KMS 2023 estimated inward remittances of ₹2.17 lakh crore and outward remittances of ₹43,378 crore. The latter was estimated for the first time in the survey.
These outward flows should not all be attributed to overseas education. Nor should changes in migration destinations automatically be interpreted as a decline in remittances. A greater tendency towards permanent settlement could have implications for Keralam's real estate market, banking deposits and consumption-driven economy.
Who is filling the jobs that Malayalis are leaving behind?
While educated Malayalis seek opportunities overseas, Keralam has become increasingly dependent on workers from other Indian states.
The state's ageing population, relatively high educational attainment and shortage of local workers willing to undertake physically demanding jobs have created sustained demand for migrant labour.
Workers from West Bengal, Assam, Bihar, Odisha, Uttar Pradesh, Jharkhand, Tamil Nadu and Karnataka have become indispensable to construction, hospitality, agriculture, manufacturing and several other sectors.
Benoy Peter, co-founder and executive director of the Centre for Migration and Inclusive Development (CMID), cites Keralam State Planning Board estimates suggesting that one in four workers in Keralam is a migrant worker. In Ernakulam, the proportion is around one in two.
A CMID study conducted during 2016-17 identified migrant workers originating from 194 districts across 25 states and Union Territories.
The study highlighted Keralam's relatively high wages, sustained employment opportunities and social networks as major attractions. Earlier estimates placed the interstate migrant workforce at more than 25 lakh in 2013, while subsequent projections suggested a considerably larger population.
How do migrant workers contribute to Keralam's economy?
Money sent home supports households and rural economies in workers' states of origin. Peter points out that remittances from migrant workers have contributed to the resilience of rural India.
At the same time, their spending within Keralam supports local shops, housing, transport and services. Peter argues that the purchasing power of migrant workers is an important source of strength for Keralam's informal economy.
CMID estimates that migrant workers spend Rs 26,100 crore annually within Keralam and send Rs 52,200 crore to their home states. These estimates illustrate the economic flows in both directions.
Migrant workers generate economic output, sustain businesses, fill labour shortages and contribute to local consumption. Keralam has effectively become both a major exporter and importer of labour.
What steps can Keralam take to address the changing migration model?
The immediate priority is not to discourage migration, which has been central to Keralam's development, but to ensure that young people make informed choices about overseas education and employment.
Greater scrutiny of recruitment agencies, transparent information about foreign universities and employment prospects, responsible education lending and stronger domestic job creation are becoming increasingly important.
Equally crucial is recognising that interstate migrant workers are not merely temporary substitutes for Keralam's departing workforce. They are an essential part of the state's economic future.