The Visa Wall: The Economics Behind Global Mobility Frictions

Image Source: Alexander W Helin/ via Getty Images

As countries in the Global North, including the US, UK, and those in the Eurozone, tighten immigration and settlement policies to manage labour market pressures, overtourism, illegal migration, and overstays, mobility from the Global South to the North is coming under increasing strain. For India, this is evident in longer visa wait times, stricter vetting, higher application rejections, excessive paperwork, and the growing need to prove “strong ties” to home. These visa-related frictions and uncertainties lead to inconveniences and financial losses for travellers and students. Domestically, there is room to address these challenges through targeted policies that strengthen the credibility and standing of the Indian passport, thereby improving global mobility provisions.

Beyond diplomatic efforts to facilitate cross-border mobility and subsequently improve passport power, targeted outreach at both local and international levels is essential to address underlying frictions and eliminate the issue of “adverse selection” in visa issuances.

Passport ranking scores assess the mobility and strength of passports based on the number of destinations their holders can access without requiring a pre-arranged visa. These rankings reflect a country’s global influence, international relationships, economic standing, and diplomatic reach. They also capture dynamics related to the openness of labour markets and cross-border mobility. India’s growth trajectory is underpinned by strong fundamentals, including a young and expanding middle class with greater spending power than ever, a vast and diverse labour force, and improving international relations. However, India’s passport ranking has fallen five places in the Henley Index (82/103), and ranks 148th out of 199 countries, according to the Nomad Index. Passport strength is an important aspect of today’s globalised world, and India’s growth story should also reflect progress in easing international travel, especially as more citizens seek opportunities abroad in a rapidly expanding economy. Beyond diplomatic efforts to facilitate cross-border mobility and subsequently improve passport power, targeted outreach at both local and international levels is essential to address underlying frictions and eliminate the issue of “adverse selection” in visa issuances. Such efforts will also help tackle challenges such as visa overstays, overtourism, the labour market impacts of migration, and the broader spillover effects associated with migration flows and tourist movements.

Global Mobility: Key Frictions 

From an information economics viewpoint, procuring a visa is analogous to seeking a loan from a bank, presenting a classic “market for lemons” problem, suggesting that individuals from the same country are perceived to pose a uniform set of risks, which operates alongside individual profiling based on personal circumstances. Threat assessments play a central role in shaping the visa application process and the overall experience of global mobility. Over time, various theories have tried to explain how perceived risks influence these assessments. Most migration flows move from the Global South to the Global North and often face significant obstacles. These barriers are shaped by a mix of factors, including ideological and cultural differences, concerns over crime, migration-related violations, labour market implications, and how the local population perceives migrants.

Looking at global mobility from the emigrants’ home countries, passport power and the privileges it offers are shaped by a range of factors, which can be broadly grouped into three categories: country-level factors (hegemony, international influence, and bilateral agreements), economic factors, and global governance factors. The following sections discuss, the economic aspects involved. 

Passport rankings among developing countries tend to improve notably as per capita incomes rise.

Economic Standing and Passport Strength

Passport power is strongly influenced by per capita income through deeper structural and developmental factors, such as the nature of institutions, governance quality, and international credibility. In essence, as countries experience rising per capita incomes, they also witness improvements in economic development and living standards, along with reductions in poverty, crime, and corruption. These developmental gains contribute to a stronger global reputation and enhanced institutional trust, which in turn can improve a country's passport power and ease of international mobility.

As shown in the figure, passport rankings among developing countries tend to improve notably as per capita incomes rise. In the context of India, potential factors linking higher incomes with reduced global mobility frictions, such as greater economic openness and improvements in structural indicators, are discussed below.

Figure 1: Passport Ranking of 144 Emerging & Developing Economies.

(Data Obtained from Henley Index & IMF, 2025. Created using Matplotlib)

Note: The line slopes downward because a lower passport rank indicates stronger passport power, which is inversely related to per capita GDP.

Economic conditions carry a two-fold implication for global mobility. First, strong open economy credentials, backed by solid trade relations, play a vital role in enhancing passport power. When a country deepens its global economic ties and fosters both business and people-to-people connections, it tends to face fewer visa restrictions and enjoys greater ease of movement. India’s trade and economic agreements with Australia, Japan, the UAE, and ASEAN illustrate this effect, as they have improved access, streamlined visa procedures, and expanded pathways for easier movement with reduced frictions.

Today, Indians are among the top contributors to global tourism markets, with travel emerging as a major driver of foreign exchange spending,.

Second, inclusive growth fundamentals play a critical role. Rising disposable incomes, intergenerational wealth transfers, and shifting preferences shaped by globalisation have all fuelled a growing appetite for international travel. Today, Indians are among the top contributors to global tourism markets, with travel emerging as a major driver of foreign exchange spending, as noted by the Reserve Bank of India. While this reflects the growing aspirations of a confident middle class, it contrasts sharply with the persistent challenges of visa frictions and restricted global mobility. Here, domestic economic factors such as population size, unemployment, and income inequality come into focus. These indicators inform how destination countries perceive immigration-related risks, influencing concerns around visa overstays, criminal activity, and labour market violations. As the perceived moral hazard increases, destination countries often respond by demanding more detailed traveller information. In this context, greater transparency and information disclosure serve as effective tools to address asymmetric information challenges, much like resolving the classic “lemon market” problem. 

The Way Ahead: Reforms at Home

While structural economic progress unfolds gradually over time, targeted and granular policy interventions can meaningfully enhance a country's passport strength and, by extension, improve global mobility outcomes. These include:

• Crackdown on dubious emigration firms: So-called visa mills and fraudulent consultancies have been involved in a range of deceptive practices, like promises of employment, defrauding individuals for fake work and student visas, forging documents, and using automated bots to secure visa appointments. These scams lead to substantial financial losses for unsuspecting individuals and cause serious damage to India’s reputation in global migration systems. The impact goes beyond the victims themselves, as it undermines the credibility of genuine applicants and puts pressure on the integrity of the overall immigration framework. The tabled Emigration Bill, 2021, marks a step in the right direction, aiming to reform outdated regulations by addressing irregular migration pathways and curbing unregistered emigration brokers. However, the bill remains pending and has neither been introduced in Parliament nor received legislative priority. 

• Enhancing Migration Diplomacy: Apart from economic and trade-related progress, the way a country manages its emigrants, especially in cases of overstays and visa violations, plays an important role in shaping international perceptions. A responsible approach to migration management creates a positive signal for destination countries and can contribute to strengthening passport power. The Germany – India Migration and Mobility Agreement (MMA), 2023, and France – India MMA, 2021, are steps in this direction. These provisions enable frictionless repatriation and encourage cleaner and legal migration pathways for potential migrants. Proactive moves like the repatriation of Indian visa violators in the US by New Delhi during President Donald Trump’s crackdown have strong signalling effects as well. 

• National Migration Policy (NMP): India’s current migration policy landscape is fragmented and lacks a unified, codified framework. As the world’s largest exporter of labour, India remains without a strategic migration policy. Instead, its approach is largely reactive. To strengthen migration diplomacy, build international trust, safeguard the welfare of its workers, reduce all types of visa-related frictions, and improve global mobility indicators, India urgently needs a coherent and forward-looking National Migration Policy. Countries such as Sri Lanka and Mexico, both major labour exporters, have already adopted structured migration policies, and India must follow suit to remain globally competitive and protect its citizens abroad. 

A good starting point, as discussed, is targeted migration management, and further, ensuring that future emigration happens in an environment with solid economic fundamentals and strong structural conditions.

While these solutions focus on trade and domestic migration policies to improve global mobility and create cleaner migration pathways, they are agnostic about external factors such as geopolitics and structural and cultural aspects of the destination country. These areas deserve closer attention, especially in India’s case. To manage migration better, future studies and policies should examine the structural factors that shape tourism and emigration demand from a broader economic perspective and adopt a country-to-country approach. India has the largest diaspora in many countries and its citizens have an increasing appetite for foreign travel. Given its strong economic growth and rising demand for global mobility, it is important for India to signal its commitment to improving passport power and managing migration effectively. This effort can serve a key role in India’s growth story. A good starting point, as discussed, is targeted migration management, and further, ensuring that future emigration happens in an environment with solid economic fundamentals and strong structural conditions. This can help reduce the information gaps that have long affected the global mobility of Indian travellers and workers.

Manish Vaidya is a Research Assistant with the Centre for New Economic Diplomacy at the Observer Research Foundation.

• Economics and Finance
• Developing and Emerging Economies
• European Union
• India
• USA and Canada
• global north countries
• global north countries
• global passport power rank
• india passport ranking
• national migration policy
• passport ranking
• visa mills

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