Germany is grappling with a critical labor shortage and aging population, with projections indicating a deficit of 7 million skilled workers by 2035.

With some 700,000 vacancies currently unfilled, the country's economic growth potential has dropped to about 0.7% now from around 2% in the 1980s. It's set to fall further to 0.5% if the country fails to resolve this problem, German Economy Minister Robert Habeck has said, stressing the importance of migration in bridging this widening gap.

Engaging the Indian student population in the German workforce may be part of the solution.

Tapping into the international student talent pool

According to the Federal Statistical Office, there are around 43,000 Indian students enrolled in German universities.

International students make up around 14% of all students in the country, according to Michael Flacke, spokesperson for the German Academic Exchange Service. International students are often the "so-called ideal immigrants" because they have already lived in Germany and learned the language, Flacke told DW.

"At the same time, we know that learning the German language, finding one's way in the German university system, which is very much geared toward independence, and the transition to the labor market poses particular challenges for international students," he said.

Enzo Weber, an employment research specialist at the University of Regensburg, said that tapping into international talent pools becomes essential as Germany faces an aging population and a shortage of skilled workers.

"By providing opportunities to international students, the state not only aims to attract skilled individuals but also to cultivate a pipeline of talent for the workforce," he said.

Work alongside studies

Germany's recent Skilled Immigration Act would also allow international students to work 20 hours per week — double the previous limit.

Suryansh is pursuing his Ph.D. in computational materials science and theoretical nanophysics at Dresden University of Technology. Speaking with DW, the 35-year-old student said the new laws are in favor of students working.

"If you have the right skills and certification, with a decent salary, life becomes easier. Also, there are options for permanent residency," he said, adding that opportunities can be found in a range of fields, including high-tech sectors such as semiconductorsand quantum computing.

"From what I have seen, the placement rate is quite good," he said, adding that many people in his lab received a job offer within two to three months.

Though the Skilled Immigration Act in Germany prioritizes qualifications, challenges remain due to the complexity of the German education system, according to Weber.

"The law's effectiveness depends on factors like digitalization and practical integration support," he said.

IT, engineering students could help industry thrive

Flacke said the shortage of skilled labor is particularly severe not only in the care and health care sector, but also in IT and engineering professions.

Indian students in Germany are enrolled in IT and engineering courses at an above-average rate, making them an important group for the labor market and for combating the shortage of skilled workers, he said.

Germany is traditionally very competitive on the international stage when it comes to engineering sciences, so the high proportion of Indian students in IT and engineering can help the country "maintain this advantage in global economic competition."

Mohammad Rahman Khan, a 26-year-old student from India, chose Leibniz University Hannover to pursue his studies in mechatronics and robotics.

In Germany, "from my observations, there is a significant demand for tech and programming-related roles compared to other sectors," he said.

Weber from the University of Regensburg said Germany's engineering sector is experiencing a high demand for skilled professionals, particularly amid transformations driven by digitalization in areas such as machinery and energy.

"With a scarcity of labor looming and the German cohort shrinking due to a birth rate of 1.4, the influx of international talent becomes a critical factor for sustaining competitiveness," he explained. He stressed the importance of attracting and retaining skilled individuals in the technical sector to meet the workforce demands of German industry.

Germany still to overcome many policy hurdles

Riya Joseph, 24, moved to Germany from the southern Indian state of Kerala in 2023 to pursue her Ph.D. in cancer research at the Dresden University of Technology. She told DW she feels the academic journey in Germany, from research assistant to a postdoctoral position, is "promising."

But a lot of work still needs to be done. Proactive measures need to be implemented by universities and employers to ensure a smooth transition for students into the workforce. Students still need legal clarity to be able to stay in Germany after their studies and obtain employment contracts.

According to Weber, "this involves learning from countries like Canada, establishing clear communication channels, addressing legal formalities effectively, and providing clarity on staying after studies."

Additionally, considering global trends like the aging workforce in the US, Germany must "make immigration laws competitive and accessible, streamline processes, offer diverse visa options, and promote seamless integration for international students and workers," Weber added.

Edited by: Sou-Jie van Brunnersum