India-related labour issues in the Gulf : November 2013 to January 2015.
Date: 2015-10-16
Institutions: Robert Schuman Centre for Advanced Studies
Subjects: GCC countries, India, bilateral relations, employment policy, expatriate worker, human rights, labour force, labour law, labour market, research report, return migration

Co-financed by the European Union

CARIM IndIA SeRIeSdevelopIng evIdenCe bASed MAnAgeMent And opeRAtIonS In IndIA-eU MIgRAtIon And pARtneRShIp (deMo: IndIA-eU MAp)   India-related labour issues in the GulfNovember 2013 to January 2015 N. Janardhan DEMO-India Research Report 2015/04EUI is Partner Institution of ICM  for the DEMO-India ProjectDEMO-India 
Developing Evidence based Management and Operations in 
India-EU Migration and Partnership 

Research Report 
Thematic Report 

DEMO-India RR 2015/04 

India-related labour issues in the Gulf  
November 2013 to January 2015 

N. Janardhan 

Political Analyst, United Arab Emirates, and 
Honorary Fellow, Institute of Arab and Islamic Studies, University of Exeter  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
This text may be downloaded only for personal research purposes. Any additional reproduction for 
other purposes, whether in hard copies or electronically, requires the consent of the Robert Schuman 
Centre for Advanced Studies. 
Requests should be addressed to mpc@eui.eu  

If cited or quoted, reference should be made as follows: 

N. Janardhan, India-related labour issues in the Gulf – November 2013 to January 2015, DEMO-India 
RR 2015/04, Robert Schuman Centre for Advanced Studies, San Domenico di Fiesole (FI): European 
University Institute, 2015. 

The opinions expressed are those of the author(s) only and should not be considered as representative 
of the official position of the European Commission or of the European University Institute. 

© 2015, European University Institute 

ISBN: 978-92-9084-337-5 
doi:10.2870/324294 
Catalogue Number: QM-02-15-710-EN-N 

European University Institute 
Badia Fiesolana 
I – 50014 San Domenico di Fiesole (FI) 
Italy 

http://www.eui.eu/RSCAS/Publications/ 
http://interact-project.eu/publications/ 
http://cadmus.eui.eu 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DEMO-India – Developing Evidence based Management and Operations in India-EU Migration 
and Partnership (DEMO: India-EU MaP) 

The Demo: India-EU MaP project, co-funded by the European Commission, is a continuation of the 
Carim India project (www.india-eu-migration.eu) and it examines the multiple facets of Indian 
migration to the EU. Its overall aim is to improve migration management between India and the EU, 
strengthen EU-India relations, and produce in-depth empirical knowledge about the different 
migration streams and pathways of Indian nationals in the EU. Its specific goals include providing: 

1. Evidence based research for more informed policy making and state intervention. 
2. Improved source country capacity in managing migration. 
3. Raising awareness among potential migrants of the risks of irregular migration.  
4. Collaboration with civil society groups.  
5. Empirical research and analysis of Indian communities across the EU, and their impact.  

The project is led by the Indian Centre for Migration in Delhi with the partnership of the Migration 
Policy Centre, RSCAS, EUI. 

For more information: 
Robert Schuman Centre for Advanced Studies (EUI) 
Villa Malafrasca 
Via Boccaccio 151 
50133 Florence 
Italy 
Tel: +39 055 46 85 817/892 
Fax: + 39 055 46 85 755 
Email: mpc@eui.eu 

Robert Schuman Centre for Advanced Studies 

http://www.eui.eu/RSCAS/

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Abstract 

This research  work  reviews  and analyzes  Gulf-Indian  labour issues from  late  2013  to early  2015.  It 
revolves  around  the  impact  of  the  Saudi  Nitaqat  and  amnesty  programmes;  bilateral  cooperation  to 
improve  coordination  on labour  matters;  impact of remittances  on  workers’ families; and the  kafala 
system. It argues that while the nationalization of workforce programmes will get increased attention 
in future, they will also fall short of their intended goals because of profit-driven market dynamics and 
lack of adequate expertise among the native population. The paper also draws attention to new reports 
that  highlight  the  positive  influence  of  remittances  and  sponsorship  systems  in  reducing  global 
inequality and poverty alleviation, thus countering those alleging human rights abuse. 

Key words: India, Gulf, Nitaqat, Kafala, human rights 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of contents 

1. Introduction ......................................................................................................................................... 7 

2. Nitaqat-hit returnees ............................................................................................................................ 7 

3. New schemes ....................................................................................................................................... 9 

4. Welfare schemes by other states ....................................................................................................... 11 

5. Pressure on higher wages and guarantees ......................................................................................... 14 

6. GCC-India cooperation ..................................................................................................................... 15 

7. Studies on the impact of remittances ................................................................................................. 18 

8. Kafala debate ..................................................................................................................................... 19 

9. Conclusion ......................................................................................................................................... 20 

References ............................................................................................................................................. 22 

Newspaper sources ................................................................................................................................ 22 

DEMO-India RR2015/04 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1. Introduction 

Other than oil and trade, Gulf-Indian relations continue to hinge on expatriates. Between six and seven 
of the 20 million expatriates living in the six Gulf Cooperation Council (GCC) countries are Indians. 
This  makes  them  the  largest  community  among  the  nearly  25  million  Indians  living  abroad.  As  a 
result, nearly half the $70 billion remittances that India receives comes from the Gulf countries.1 

Another factor that is important to remember in the context of the Indian community in the Gulf is 
that at least half of them are unskilled workers and single; about a quarter of them are semi-skilled, 
again most of them single; and the rest are professionals and businesspeople, living with their families. 

A combination of the above factors means that the Indian expatriate community plays an important 
role,  both  for  the  countries  of  origin  and  the  countries  that  they  work  in.  Naturally,  there  are 
considerable efforts on the part of governments on both sides to manage the expatriate community as 
effectively as possible. 

This  research  work  is  an  attempt  to  review  and  analyze  Gulf-Indian  developments  pertaining  to 
labour issues from November 2013 to January 2015. The literature for this exercise was obtained from 
the  India-specific  articles  collated  in  the  Gulf  Labour  Markets  and  Migration  programme  website 
(http://www.gulfinthemedia.com/gulflm/index.php).  

The  empirical  and  objective  analyses  –  from  the  perspectives  of  the  labour-sending  and  labour-

receiving countries, as well as human rights – broadly revolves around the following themes: 

-  impact  of  the  Saudi  Nitaqat  (quota  system  for  nationals  in  the  workforce),  and  amnesty 
programmes on Indian workers; and the response of the central and state governments in India 
to help returnees; 

- Gulf-India cooperation to improve coordination on labour matters; 

-  impact  of  remittances  on  workers’  families  in  India  as  laid  out  in  two  controversial  and 
differently-concluded studies; and 

- the debate revolving around the Kafala (sponsorship) system, even though it is not directly 
related to Indian expatriates in the Gulf. 

2. Nitaqat-hit returnees  

Indians  topped  the  number  of  expatriates  who  took  advantage  of  the  amnesty  period  granted  to 
‘illegal’  workers.  About  1.4  million  Indians  in  Saudi  Arabia  availed  themselves  of  the  grace  period 
that ran from early April to early November 2013.2 The amnesty was offered to all expatriate workers 
in  the  Kingdom  who  did  not  have  valid  work  and  residence  permits.  This  was  a  follow-up  to  the 
second phase of Nitaqat, first launched in 2011. The Nitaqat policy makes it mandatory for all Saudi 
companies to reserve a certain percentage of their jobs for Saudi nationals. 

By the end of the amnesty, about 141,000 Indians returned home from Saudi Arabia without facing 
penal action or a ‘ban’ on their possible return. The rest stayed on in the Kingdom after rectifying their 
work  permits  by  changing  their  job  titles  and  professions,  or  changing  sponsors  and  renewing  their 
expired work permits, or renewing their iqamas or residence permits.  

1 The Economic Times (New Delhi), 1.12.2014: India’s highest amount of remittances comes from the Gulf.  
2 Gulf News (UAE), 19.12.2013: 141,000 Indians return from Saudi Arabia. 

DEMO-India RR2015/04 

 
                                                      
N. Janardhan  

Though detailed data for Indian returnees is still unavailable, about 35,000 reportedly hailed from 
the  northern state of  Uttar Pradesh,  13,000  from  Andhra  Pradesh  and  7,500  from  Tamil  Nadu,  both 
southern states, while 10,000 were from West Bengal in the east.3 

The exact number of returnees from the southern state of Kerala, which traditionally sends the most 
Indians  to  the  Gulf,  is  also  uncertain.  But,  at least  22,000  returnees  registered  for  assistance  to  start 
self-employment  programmes  as  part  of  a rehabilitation scheme  developed by  the  state  government. 
This was part of an exclusive budget of about $8.5 million for the rehabilitation of returnees.4  

The  registration  process  for  self-employment  programmes  was  coordinated  by  the  Non-Resident 
Keralites’ Affairs Department (NORKA), which acts as an interface between the people from the state 
working abroad and the state government in addressing their concerns, safeguarding their rights and 
rehabilitating them. 

NORKA  organized  short-term  training  sessions  at  the  district  level  on  how  to  run  a  successful 
business or self-employment programme. The government plan included a subsidy on both the capital 
and interest on short- and long-term loans to help them in resettlement. The maximum loan amount 
offered  was  about  $32,000.  A  10  percent  subsidy  was  also  offered  to  all  those  who  started  an 
enterprise in agriculture, manufacturing, trading and the service sectors.  

Due  to  various  delays,  the  loan  disbursement  process  started  only  in  December  2014.  But  even 
before that, the programme had few takers because of the risks involved in starting a new business. 
Instead,  the  government  offered  sops  to  private  firms  willing  to  recruit  returnees.  The  incentives 
included interest subsidies on loans and the facilitation of clearances of new projects. The incentives 
were available to firms that hired at least 25 percent of their fresh recruitments from among the Saudi 
returnee pool.  

An interesting observation from a local official was that accommodating returnees in the domestic 
market  was  not  a  difficult  task.  ‘Labour-deficient’  Kerala  depends  on  internal  migrants  from  other 
states  for  a  large  number  of  unskilled  and  skilled  jobs  in  the  state.  According  to  the  official,  the 
number  of  migrants  working  in  the  state  is  almost  equivalent  to  the  number  of  people  from  Kerala 
working abroad.5 

The  problem,  however,  was  that  apart  from  not  wanting  to  avail  themselves  of  loans  and  start 
businesses, most returnees were unable to get used to working in the state or anywhere else in India. 
Most of them preferred to go back to the Gulf as a job abroad paid better and enhanced their social 
status. 

In  fact,  most  of  those  who  returned  from  Saudi  Arabia  managed  to  find  jobs  again  in  the  Gulf. 
According to data available for about 750,000 Indians, “747,000 Indian workers left home in 2012. Of 
this number, 357,000 came to Saudi Arabia and 364,000 went to other GCC countries. This means that 
96 percent of the total number of Indian workers came to GCC countries,” a Saudi official said.6 

This  trend  of  Indian  returnees  going  back  to  the  Gulf  has  another  parallel  from  the  2008-2010 
period. Due to the impact of the financial crisis and the resultant global economic slowdown, the GCC 
labour  market  also  experienced  contractions  and  related  problems,  particularly  in  the  private  sector. 
According to a survey on professional job losses, while the GCC average was 10 per cent, the figure 
was highest in the United Arab Emirates (UAE) at 16 per cent and lowest in Oman at six per cent.  

3 The Indian Express, 4.11.2013: Most Indian workers meet Nitaqat deadline, regularise stay in Saudi. 
4 Arab News (Saudi Arabia), 13.10.2014: Nitaqat-hit Keralites seek govt assistance. 
5 Khaleej Times (UAE), 11.11.2013: Kerala offers sops to firms recruiting Saudi returnees. 
6 Arab News, 25.09.2014: Riyadh taking steps to rein in Asian wages. 

8 

DEMO-India RR2015/04 

                                                      
India-related labour issues in the Gulf – November 2013 to January 2015 

Overall,  the  economic  crisis  affected  the  GCC’s  surging  population  growth,  especially  that  of 
expatriates. Dubai, for example, was tipped to see the number of residents reduced by eight per cent in 
2009 and by two per cent in 2010, mostly because of the real estate and construction sectors slowing 
down. Continued economic growth in Abu Dhabi and Qatar, however, cushioned them against further 
economic  slowdown  and  outflow  of  expatriates.  The  UAE  labour  ministry  corroborated  this.  While 
405,000 visas were cancelled between October 2008 and March 2009, 662,000 new ones were issued. 
Thus, more expatriates found, rather than lost, jobs in the UAE in this period.  

With regard to Indians in particular, about 200,000 in the UAE reportedly returned home due to the 
real estate slump.  India stressed at that time that its economic growth, despite the global slowdown, 
was  capable  of  reabsorbing  any  surplus  workforce  that  returned  from  the  Gulf.  Some  of  these 
assertions were backed by figures emerging out of Kerala state.  

While 173,000 workers from Kerala returned home from the Gulf between October 2008 and June 
2009, about 97,000 went back to fresh jobs in the Gulf. In addition, 142,000 people from Kerala also 
took up new employment in the Gulf (Janardhan 2012a). This means that more people got jobs in the 
Gulf during the crisis period than those who lost work. “We were expecting Kerala to be very badly 
affected, but both migration and remittances have not been affected much. Kerala migrants have been 
able to adjust,” stressed a report from the Centre for Development Studies, Kerala.  

Forecasts, then and now, about rapid economic development in India discouraging Indian workers 
from  taking  jobs  in  the  Gulf,  especially  in  the  unskilled  segment,  have  not  materialized.  This  is, 
perhaps, due to the unequal economic development in different parts of the country. What it has done 
to some extent, however, is to change the profile of Indian workers going to the Gulf.  

Instead of workers from South India, where economic development has been better,  going to the 
Gulf, there was a marginal increase in the numbers of those hailing from parts of North India, where 
economic  growth  has  been  slower.  The  same  trend  was  visible  with  Nepalese  workers  edging  out 
Indians  in  Qatar’s  construction  sector,  because  the  former  were  willing  to  accept  lower  wages  than 
Indians. 

3. New schemes 

The fallout of the Saudi Nitaqat and amnesty programmes, nevertheless, served as an opportunity for 
the Kerala government to roll out a raft of welfare measures for people from the state working in the 
Gulf countries as part of its $8.5 million dollar programme. These included: 

-  new  arrangements  to  check  the  profession  and  visas  of  unskilled  workers  travelling  to  the 
Gulf countries to ensure that they are not cheated by unscrupulous agents and middlemen;  

- train and upgrade skills, as well as conduct an orientation programme for its residents prior 
to their departure to the Gulf;  

-  and  set  aside  funds  for  workers’  litigations  abroad  and  repatriate  the  mortal  remains  of 
workers from the state in case of death abroad.7 

While the Indian and various state governments reacted promptly to the fallout from the  two crises, 
there  is  every  likelihood  that  such  situations  could  repeat  themselves  either  in  Saudi  Arabia  or  in 
another Gulf country. This is because the nationalization of the workforce is a recurring theme across 
the six-country bloc, even though implementation strategies and success rates vary. 

Saudi  Arabia  has  announced  that  its  third  phase  of  Nitaqat  will  begin  in  April  2015.  This  will 
increase  the  Saudization  quotas  for  big  firms  from  25  to  41  percent,  the  same  as  in  the  retail  and 

7 Arab News, 2.2.2014: Indian state allocates 500 million rupees for expats. 

DEMO-India RR2015/04 

9 

                                                      
N. Janardhan  

wholesale trade sector. For big groups, this will be raised from 29 to 66 percent. According to the new 
terms, companies have to meet the new quotas if they wish to expand their operations, get visas for 
workers and have access to the other services offered by the Ministry of Labour.  

But,  as  in  the  past,  the  government  knew  it  would  be  difficult  to  implement  the  nationalization 
programme as effectively as desired because of the lack of skilled national workers in the job market. 
There is also the problem of the reluctance of the private sector to further this programme at the cost 
of their business growth.  

Even  with  regard  to  the  ongoing  Nitaqat  programme,  Saudi  businesses  have  urged  a  delay  of 
between one to three years. The Council of Saudi Chambers (of commerce) said: “We understand the 
ministry’s  desire  to  increase  the  Saudization  rate  to  accommodate  new  Saudi  graduates  from 
universities  and  technical  institutes.  However,  the  ministry  must  take  into  account  the  reality  in  the 
market.  The  market  does  not  have  adequate  number  of  qualified  Saudi  hands  to  fill  industrial  jobs. 
Private  companies  do  not  attract  enough  Saudi  workers  when  they  advertise  to  fill  vacancies,  even 
after offering good salaries and benefits.”8 

These  kind  of  obstacles  are  not  new.  They  can  be  traced  back  to  more  than  a  decade  ago.  In 
September  2002,  Saudi  officials  declared that from  March  2003,  all expatriate  taxi  drivers  –  mostly 
from India and Pakistan – would be replaced by nationals within a few years. With the proposal not 
making  headway  because  of  the  reluctance  of  Saudi  private  taxi  companies,  it  was  later  announced 
that the substitution process would take longer to implement. The last word on this has not yet been 
heard (Janardhan 2012b). 

On a positive note, however, the Saudi government clarified that three years of the Nitaqat scheme 
has helped 750,000 Saudis find new jobs in the private sector.9 More Saudis could have found jobs, 
but  about  682,000  women  refused  to  accept  the  private  sector  employment  offered  to  them  by  the 
labour  ministry’s  Hafiz  unemployment  assistance  programme.10  Further,  the  demand  for  foreign 
workforces, which is both cheaper and easier to hire and fire, meant that more than 1.7 million work 
visas  were  issued  in  2013  despite  the  Nitaqat  scheme.  This  naturally  affected  the  Kingdom’s 
nationalization initiatives as this large-scale recruitment took place when more than a million Saudis 
were awaiting employment.  

A November 2014 report revealed that the average unemployment rate among nationals in the Gulf 
countries is 27.2 percent, which is twice the average global rate. It is feared that governments will not 
be able to provide welfare for citizens much longer due to the slump in oil prices and the increase in 
the population. Further, the industry and services sectors would not be able to absorb local graduates 
in large numbers because of their inadequate skill sets.11 

What  these  trends  indicate  is  that  while  the  nationalization  of  workforce  programmes  will  get 
increased  attention  in  future,  they  will  also  fall  short of  their  intended  goals.  This  is  because  of  the 
factors discussed above – including inadequate skills among nationals to meet private sector demand, 
lack of interest among nationals working in the private sector, and the private sector’s reluctance to 
employ nationals, among others.  

While foreign workers are benefitting from these factors, the sending countries should be wary of 
possible  changes  in  the  medium  term.  Bahrain  and  Oman  have  had  better  success  rates  in  their 
nationalization  drives  because  they  are  economically  less  prosperous  than  their  other  GCC 

8 Arab News, 29.1.2015: New Nitaqat quotas difficult to implement. 
9 Arab News, 7.10.2014: Recruitment of 1.2m expats defeating Saudization drive. 
10 Saudi Gazette, 30.12.2014: 682,000 Saudi women say no to private sector jobs. 
11 Arab News, 2.11.2014: Unemployment reaches 27 percent in the Gulf. 

10 

DEMO-India RR2015/04 

                                                      
India-related labour issues in the Gulf – November 2013 to January 2015 

counterparts. Saudi Arabia and Kuwait may follow suit, leaving the UAE and Qatar as the last in the 
bloc to effectively follow this policy.  

Looking ahead, to encourage nationalization of the workforce, the GCC states may adopt a unified 
mechanism to rationalize the employment of foreign workers and to regulate their movement within 
the  member  countries.  A  related  proposal  was  discussed  by  the  GCC  labour  ministers  in  November 
2014. The meeting did not propose an immediate cut in the expatriate workforce in member countries. 
“The ministers agreed not to reduce the percentage of expatriate workers. Instead they agreed on job 
rationalization  and  employment  of  citizens  by  preparing  them  to  replace  expatriates  in  a  number  of 
areas through training and rehabilitation programmes,” one of the GCC labour ministry official said.12 

But Nitaqat met a few objectives. A total of 200,118 private sector companies out of 1.8 million in 
the ‘Red Zone’ were closed down by the end of 2013, according to the Saudi labour ministry. It was 
pointed  out  that  58.6  percent  of  these  firms  are  micro  and  small  enterprises,  which  are  required  to 
employ  at  least  one  Saudi national.  Further,  180 large  companies remain  in the  ‘Red’ and  ‘Yellow’ 
zones for not meeting the required quota of Saudi workers. 

Nitaqat  also  applies  to  255,833  companies,  which  have  10  or  more  employees,  whereas  small 
companies with less than 10 employees, known to be in the ‘white’ zone, are exempt, but are required 
to employ at least one Saudi national.13 

4. Welfare schemes by other states 

During the period under review, several other provincial governments in India launched programmes 
catering to people from their states working in the Gulf.  

In an effort to help Indians in the Gulf states, particularly Saudi Arabia, the southern Indian state of 
Andhra Pradesh launched a Web portal (www.apnri.ap.gov.in). This was supposed to help deal with 
various difficulties faced by the people hailing from the state. The welfare measure came in response 
to  demands  from  political  parties  in  the  state  for  rehabilitation  of  workers  hailing  from  the  state 
following the Nitaqat crackdown.14 

The main objective of the portal was to generate a database of people from the state in the Gulf and 
to help provide services pertaining to the authentication of  educational certificates, the attestation of 
certificates and documents. 

The  state-level  pilot  project  covered  five  districts  of  Adilabad,  Kadapa,  Karimnagar,  Nizamabad 
and West Godavari, from where most of the state’s people working in the Gulf hail. The capital city of 
Hyderabad was the headquarters for creating management information and application system of non-
resident Indian (NRI) affairs on migration profiling and other online services. A help desk was also 
established at Hyderabad airport with a database available with passport portal linkage. 

In  January  2015,  the  north  Indian  state  of  Uttar  Pradesh  followed  Andhra  Pradesh’s  trend  and 
rolled out a host of welfare measures to help workers from the state in the UAE. The state government 
set up an exclusive Web portal and hotline service for NRIs from the state to ensure assistance in case 
of emergencies, to monitor their problems and to coordinate with the central government. The services 
were  specifically  meant  to  help  families  of  the  NRI  workers  to  contact  government  officials  if  any 
problems arose while getting in touch with family members earning in the UAE.  

12 The Peninsula (Qatar), 27.11.2014: No immediate plan to cut expat workforce, say Gulf ministers. 
13 Arab News, 13.9.2014: 200,000 Nitaqat-hit firms close down. 
14 Arab News, 25.11.2013: Website launched for Andhra NRIs. 

DEMO-India RR2015/04 

11 

                                                      
N. Janardhan  

A  migrant  resource  centre,  where  NRIs  from  the  state  in  the  UAE  could  lodge  their  complaints 
24X7 and seek advice when needed, was part of the welfare initiatives. NRIs from the state could avail 
themselves  of  a  state-specific  fast  track  NRI  Card,  which  would  get  them  preferential  treatment  at 
government offices considering their limited time to complete their paper work while on vacation.15 

But  given  the  record  of  poor  implementation  of  such  services  in  the  past,  it  remains  to  be  seen 
whether  such  facilities  will  actually  be  used  by  the  workers  or their families,  or  how  effective  such 
mechanisms will be in offering relief to those who need it.  

In  another  move  initiated  in  March  2014,  about  1.4  million  blue  collar  Indian  workers  in  Saudi 
Arabia started benefitting from a new social security scheme introduced by the central government’s 
Ministry  of  Overseas  Indian  Affairs.16  Called  the  Mahatma  Gandhi  Pravasi  Suraksha  Yojana 
(Overseas Protection Plan), it consists of three major components:  

- free of cost insurance cover; 

- old age pension; 

- resettlement savings. 

A few months earlier, the scheme was introduced by the Indian mission in the UAE, and was expected 
to benefit at least 600,000 workers initially.17  

According  to  the  scheme,  a  beneficiary  will  get  life  insurance  cover  under  a  plan  from  the  Life 
Insurance Corporation of India, the premium for which will be paid by the government. In the event of 
death  or  permanent  disability  in  an  accident,  a  sum  of  $1,200  will  be  paid  to  the  family  of  the 
deceased. In case of natural death or partial disability in an accident, an amount of $600 will be paid. 

Under the National Pension System and return and resettlement savings, the worker needs to pay 
about $100 a year, to which the government will contribute about $35 dollars for male workers and 
$55 for women workers for five years. The savings will be managed by credible public sector pension 
funds  and  the  worker  will  be  eligible  to  receive  a  regular  monthly  pension  at  60  years  of  age.  It  is 
possible for the worker to continue investing even after returning to India.  

The beneficiaries will be able to withdraw their accumulated return and resettlement savings as a 
lump sum upon their return to India. But a worker must make a minimum of $100 contribution to be 
eligible for the security scheme.  

A few other initiatives aimed at helping workers include: 

- A labour guide entitled “Employment in the Kingdom of Saudi Arabia: A guide for Indian 
workers”  was  launched.  This  is  a  54-page  booklet  containing  all  the  relevant  labour-related 
information that the Indian expatriates need to know for life in the Kingdom.18 

-  A  first  of  its  kind  centre  –  Pravasi  Seva  Kendra  (NRI  Service  Centre)  –  was  opened  in 
Jeddah to provide Indian expatriate workers with legal guidance on labour issues and health 
counselling.19 

-  A  Qatari  Ministry  of  Labour  initiative  will  now  help  aggrieved  Indian  workers  to  file 
complaints  against their  employers  in  several  Indian  languages,  using  self-service  machines. 
Among many Asian languages introduced by the Ministry of Labour were Hindi, Urdu, Tamil 

15 Khaleej Times, 8.1.2015: Indian state’s welfare plans to assist expatriates in the UAE. 
16 Saudi Gazette, 19.3.2014: 1.4m Indians to benefit from new social security scheme. 
17 Gulf News, 29.10.2013: 600,000 Indian expats eligible for pension in UAE. 
18 Saudi Gazette, 27.3.2014: CG launches handbook for Indian workers. 
19 Arab News, 7.12.2014: Center opened to guide Indian expatriates on labour problems. 

12 

DEMO-India RR2015/04 

                                                      
India-related labour issues in the Gulf – November 2013 to January 2015 

and Bengali. All a worker needs to do to lodge a complaint is follow three simple steps to fill a 
form using the self-service machines. A printout of the complaint with all the relevant data can 
then be submitted to the labour affairs department at the labour ministry, which will resolve 
disputes amicably. The new device aims at removing communication barriers created by many 
workers’ lack of knowledge of Arabic and English.20  

-  All  non-resident  Indians,  including  those  in  the  Gulf,  will  now  be  able  to  cast  their  vote 
through  electronic  ballots  or  through  their  nominees  residing  in  India.  On  both  counts, 
logistical  details  have  not  yet  been  announced.  The  Election  Commission  discarded  other 
possibilities  –  postal  ballot  and  internet  voting  –  fearing  manipulation.  Moves  are  afoot  to 
provide similar opportunities for migrant labourers within India, who constitute nearly 30% of 
the  total  population.21  In  Kerala,  however,  NRIs  were  allowed  to  vote  in  the  2011  state 
elections. Many politically active and enthusiastic NRIs from the UAE – who were members 
of the Kerala Muslim Cultural Centre, linked to Indian Union Muslim League political party – 
chartered flights to cast their ballot. This was the first opportunity for those living abroad to 
express their political choice.22  

But one less positive measure is a tax on remittance fee. In a disincentive, especially to low-income 
Indians in the Gulf, New Delhi started levying a service tax on “fees or commission” charged by banks 
and  financial  institutions  for  facilitating  remittances  from  abroad.  For  example,  the  remittance  fee 
from the UAE to India costs up to $6. A part of this amount  – between $1.5 and $3 – is paid to the 
agents in India, which will now bear the new service tax. Although it is a small amount for a single 
transaction, an agent doing thousands of transactions has to pay a huge amount as tax, which is most 
likely be passed on to the remitters from the Gulf.23 

This  is  unjustified  because  NRIs  deserve  incentives  for  bringing  foreign  currency  into  India. 
Further, while the government provides incentives to rich exporters in India to promote inward foreign 
currency remittance, the tax on service fee in the Gulf context hurts millions of poorer workers. 

Another report highlighted how complaints from Indian workers in some Gulf countries have gone 
up with the highest number being reported from Qatar. Between January and November 2014, a total 
of  13,610  grievances  were  registered,  as  against  12,720  recorded  in  2013.  While  2,991  complaints 
were  filed  from  Qatar,  2,973  were  from  Saudi  Arabia.  Complaints  were  mostly  related  to  non-
payment,  delayed  payment  or  underpayment  of  salaries,  long  working  hours,  inadequate  living 
conditions, physical harassment, non-renewal or the late renewal of visas and labour cards.24  

Justifying the high number of complaints from Qatar, which is in the midst of a major development 
drive, especially the 2022 FIFA World Cup, 277 Indian nationals died in Qatar in 2014. The number 
of deaths in 2011, 2012 and 2013 were 239, 237 and 241 respectively.25 

20 The Peninsula, 16.7.2014: Labour complaints in Asian languages allowed. 
21 The Hindu (India), 13.1.2015: NRIs can vote from abroad. 
22 Gulf News, 16.3.2014: Chartered flights for Keralites who wish to vote. 
23 Gulf News, 26.11.2014: India begins levying service tax on remittance fee. 
24 Press Trust of India, 27.11.2014: Complaints by Indian workers working in Gulf on the rise. 
25 Gulf Times (Qatar), 31.12.2014: 277 Indian nationals died in Qatar in 2014. 

DEMO-India RR2015/04 

13 

 
 
                                                      
5. Pressure on higher wages and guarantees 

N. Janardhan  

There were contradictory reports on Indian government efforts to influence the Gulf countries to raise 
the  wages  of  millions  of  Indians  in  the  region.  The  Ministry  of  Overseas  Indian  Affairs  (MOIA) 
justified this demand for increased salaries on the grounds of inflation in India, the value of the Indian 
currency and a rise in the cost of living in the Gulf. The Indian missions in the region, however, denied 
that any such demand existed.  

How can this contradiction be explained? While the Indian government in Delhi could have made 
this announcement as a reaction to domestic political pressure for better wages for those working in 
the  Gulf,  the  Indian  missions  knew  very  well  that  such  a  demand  would  be  disliked  by  the  Gulf 
governments. In most cases, foreign governments cannot dictate the pay of its citizens in the Gulf. The 
decisions to hire are made by labour recruiters in individual countries, which have not set minimum 
wages for migrant workers.  

And,  since  the  Gulf  governments  prohibit  union  activity,  workers  rarely  have  opportunities  to 
organize  themselves  to  seek  higher  wages.  Most,  importantly,  any  such  move  to  increase  minimum 
wages risks pushing many Indians out of the market, because the workforce from other South Asian 
countries is ready to work for lower salaries. 

The Indian government may have sought to influence the wages through recruiters at home because 
the latter must rely on the cooperation of local government authorities to operate in India. An internal 
memorandum  prepared  by  the  MOIA  said  that  if  workers  are  offered  wages  below  specified 
minimums,  ministry  officials  “would  deny  emigration  clearance”  for  such  workers.  This  would 
eventually hurt the business of recruiters. 

In  Saudi  Arabia,  the  Indian  embassy  reportedly  increased  the  recommended  minimum  salary 
posted on its website from $180 to $320 a month in early 2014. In the UAE, the minimum wage for 
Indian blue-collar workers also reportedly rose from $320 to about $400 in late 2014.  

The fact, however, is that even when Gulf recruiters agree to certain wage levels, the numbers do 
not necessarily stick. Some workers are promised one salary when they sign up in their home country, 
then forced to renegotiate lower wages when they arrive in the Gulf. It is difficult to see how this ‘dual 
contract’ malpractice can be remedied. 

Some  countries,  like  Saudi  Arabia,  publicly  threatened  to  reduce  the  Indian  workforce  and  hire 

lower-paid workers from Bangladesh and Nepal instead. Riyadh said: 

If this is a decision that is applied throughout India as a  whole,  meaning no one  gets out of India for 
work unless with that limit, then this is a sovereign decision for the country and we will not interfere. 
But if it is a special decision to raise wages for whoever comes to work in the kingdom, then we oppose 
it and do not accept it, as it would be an act of discrimination and we don’t accept that in international 
agreements. 26  

Debunking the issue of government pressure on higher wages, the Indian mission in the UAE said no 
request  or  demand  for  revision  in  minimum  wages  was  made  in  the  UAE.  It  clarified  that  the  last 
revision was made in March 2011 and that if wage changes had occurred more recently, it could be 
that recruiters were enforcing the changes belatedly.  

In  this  context,  it  is  worth  revisiting  the  debate  on  the  issue  of  foreign  governments  trying  to 
influence  minimum  wages  and  labour  law  changes  about  a  decade  ago.  In  particular,  the  GCC 
governments were concerned about demands for labour law changes from  the United States and the 
European Union during free trade agreement negotiations (FTA). The UAE, for example, aborted FTA 
negotiations with the United States on these grounds.  

26 Reuters, 17.11.2014: India urges higher pay for millions of Gulf workers. 

14 

DEMO-India RR2015/04 

                                                      
India-related labour issues in the Gulf – November 2013 to January 2015 

In  2008,  the  GCC  countries  also  faced  pressure  from  several  Asian  countries  to  pay  minimum 
wages for unskilled workers. However, the GCC countries resisted the proposal for several reasons, 
including  fears  that  higher  wages  would  add  to  inflation,  which  was  at  an  all-time  high  due  to  the 
depreciating dollar.  

For  example,  though  India  was  partly  successful  in  implementing  a  minimum  wage  of  $300  for 
maids in Saudi Arabia, it failed to expand this to other unskilled workers, after the Kingdom refused to 
sign a memorandum of understanding to do so. Likewise, it managed to increase salaries informally in 
some  cases  in  Bahrain.  But  it  failed  to  formally  enforce  a  minimum  monthly  wage  of  $265  for  all 
unskilled Indian workers, instead of the then prevailing $160-$225 a month.  

The attempts to increase minimum wages did not uniformly succeed then, and it would not in the 
future. The workforce-exporting countries realized that companies in the Gulf would simply substitute 
workers from other countries who were willing to work for lower salaries. So when the Philippines’ 
government attempted to set minimum wages, the demand for Filipino maids dropped by 50 percent.  

Kuwait,  however,  introduced  a  minimum  wage  for  some  low-wage  jobs  such  as  cleaners  after 
violent  protests  by  Bangladeshi  workers.  But  the  rule  was  not  always  implemented  strictly.  With 
regard to the UAE, India had said: “We understand the (UAE) government’s cautious approach…We 
cannot force the government here into anything. But we can set a certain form of minimum wage for 
our own workers” (Janardhan 2012a). 

As a result, in the current context, the Indian government introduced other safeguards to protect the 
rights  of  Indian  domestic  workers  in  the  Gulf.  One  such  example  was  the  decision  that  Kuwaiti 
employers  must  submit  a  bank  guarantee  of  $2,500  when  bringing  woman  domestic  workers  from 
India  to Kuwait.  Starting September  2014, this  meant  a  security  deposit  with  the  Indian  embassy  in 
Kuwait. This measure is also operational in Saudi Arabia and Oman. The logic is that if any sponsor 
violates  the  contractual  obligations,  the  deposited  money  can  be  used  to  protect  the  interests  of  the 
worker, including clearance of unpaid dues or hospitalization of workers in case of maltreatment. 

An  angry  Kuwaiti  National  Assembly  responded  to  this  move  by  voting  to  give  its  health  and 
labour committee the power to draft a law on the establishment of a company for the recruitment and 
employment of domestic workers. Some members of parliament called for retaliatory actions against 
New Delhi and urged the government to consider halting the recruitment of manpower from India to 
oppose  bank  guarantees.  They  described  the  Indian  decision  as  a  breach  of  the  law  and  diplomatic 
norms,  as  well  as  of  Kuwaiti  law  and  the  constitution.  Preserving  the  rights  of  Kuwaiti  citizens, 
expatriates and foreign workers in Kuwait is the duty of the Kuwaiti government and not the Indian 
embassy,  the  MPs  warned.  They  also  claimed  that  accepting  the  Indian  decision  would  encourage 
similar measures by other countries.27 

6. GCC-India cooperation 

A significant step that would positively help hundreds of thousands of Indians in the Gulf is the GCC 
labour ministers’ agreement on minimum terms in the contracts of domestic workers to improve the 
working conditions of over 2.4 million foreign maids.  

The  deal  followed  the  latest  round  of  the  Abu  Dhabi  Dialogue,  launched  in  the  UAE  in  2008, 
between ministers from the twelve Asian workforce-sending countries and the GCC states. Formulated 
in association with the International Labour Organization, the deal is aimed at “preventing abuse in the 
recruitment  process,  protecting  workers’ rights,  improving  regulation  and  strengthening  oversight  of 
private recruitment.”  

27 Kuwait Times, 15.9.2014: Security deposit for safeguarding welfare of Indian workers. 

DEMO-India RR2015/04 

15 

                                                      
While the devil in this case lies not in the details, but the degree and efficiency of implementation, 

N. Janardhan  

the blueprint of the contract sets: 

- daily work at eight hours; 

- limits overtime to two hours; 

- requires the provision of decent accommodation; 

- stipulates the right for days off; 

- bans employers from keeping employees’ passports; 

- ensures the freedom of domestic helpers to move or live outside the home of the employer 
and to travel at any time; 

- commits employers to provide air tickets for the workers at the end of the contract.  

The  measures  also  include  initiatives  and  programmes  for  wage  protection,  speedier  settlement  of 
labour disputes, a skill development and testing programme and a pre-departure orientation initiative. 
In  particular,  the  wage  protection  programme  obliges  all  employers  in  GCC  countries  to  transfer 
salaries of workers to banks to ensure payment and easy monitoring.28 

The  UAE,  which  first  introduced  the  Wage  Protection  System  (WPS),  in  2009,  has  found  this 
system  to  be  very  beneficial.  This  electronic  system  launched  in  cooperation  with  the  UAE  Central 
Bank  ensures  that  companies  transfer  the  wages  of  their  workers  through  banks,  money  transfer 
companies and other service providers, rather than by making cash payments. The Ministry constantly 
reviews  the  electronic  system  and  its  ATM  card-based  operations.  By  the  end  of  2014,  the  UAE’s 
WPS involved over 250,000 companies and covered nearly four million workers (UAE 2015). 

In  addition,  India  and  Saudi  Arabia  signed  an  Agreement  on  Labour  Cooperation  for  Domestic 
Service Workers Recruitment. Some of the main features of the agreement are: it protects the rights of 
both the employers and domestic workers and regulates the contractual relation between them; ensures 
the authenticity and implementation of the employment contract; takes measures against recruitment 
agencies  who  violate  laws;  and  establishes  a  mechanism  to  provide  round  the  clock  assistance  to 
domestic workers.29 

It stipulates that maids must be given free time for at least eight hours daily and a fifteen-day paid 
vacation annually or 30 days after two years of service. The National Recruitment Committee fixed 
the monthly salary of Indian maids at $330, plus return economy air tickets to visit home. The deal 
states that employers must deposit the maids’ salaries in their bank accounts in the Kingdom at the end 
of every month and show proof of payment for their domestic workers. 

Employers are also obliged to help workers transfer their salaries back home and maids should be 
given enough freedom to contact the embassy or the consulate, or their family members. Further, an 
age  stipulation  was  introduced:  Indian  maids  looking  for  employment  in  Saudi  Arabia  must  be 
between 25 and 50 years.30 

Another  Saudi-India  agreement  pertaining  to  recruitment  of  Indian  domestic  workers,  including 
maids,  was  signed.  This  agreement  was  to  protect  the  rights  of  domestic  workers  as  well  as  their 
employers  and  to  regulate  the  contractual  relationship  between  the  two  parties.  It  also  sought  to 
organize the recruitment process and to control the cost of recruitment in both countries. It stipulates 
that domestic workers should: 

28 Agence France-Presse, 28.11.2014: Gulf, Asia okay steps to protect foreign workers. 
29 Khaleej Times, 3.1.2014: India, Saudi Arabia ink landmark accord on domestic workers. 
30 Arab News, 30.8.2014: No change in Indian housemaids’ recruitment pact. 

16 

DEMO-India RR2015/04 

                                                      
India-related labour issues in the Gulf – November 2013 to January 2015 

- have no criminal records; 

- be trained in specialized centers in household work; 

- be educated in the Kingdom’s customs and traditions;  

- be knowledgeable about the terms and conditions of the employment contract.31 

These  terms  assume  importance  because  an  average  of  over  550  Indian  women  go  to  the  GCC 
countries  for  work  every  week,  according  to  the  Indian  Ministry  of  Social  Affairs.  In  2013,  29,637 
work visas were issued for women.32 

Another significant example of Gulf-India cooperation in the labour domain is the pilot initiative 
launched by Kuwait and the UAE to train 2,500 workers in India, Pakistan and the Philippines, before 
coming to work in the construction sector in the Gulf. The workers will be recruited randomly and will 
be trained to work for Gulf-based enterprises. The UAE Ministry of Labour said the workers’ skills 
will be assessed while in the UAE. 

The  two-year  initiative  was  commissioned  in  late  2014  and  will  be  a  skill  assessment  and 
certification project. The two countries have also decided to establish a website to assess the skills of 
workers recruited from the three countries. 

Based  on  a Kuwaiti  proposal, a  centre  will  evaluate professional  skills  and  the capabilities  of  an 
expatriate worker before recruitment in Kuwait. The centre will issue a certificate on the basis of tests. 
The  centre  also  aims  to  secure  the  rights  and  obligations  of  both  employers  and  workers  alike.  A 
number  of  relevant  international  organizations,  including  the  World  Bank  and  International  Labour 
Organization are involved in the project.33 

The  logic  behind  the  move  is  that  the  entry  of  trained  and  qualified  expatriate  workers  would 

positively affect the GCC economies, thereby enhancing the stability of the region. 

Three more agreements deserve attention: 

- A treaty to allow Indian prisoners in Qatar and Qatari prisoners in India to be shifted to their 
respective  countries  so  that  they  can  be  closer  to  their  families  while  serving  the  remaining 
part of their sentence, thus facilitating their social rehabilitation. India has so far signed such 
agreements with more than twenty countries, including Saudi Arabia and Kuwait.34  

- An agreement to set up centers for crash courses in Arabic in cooperation with Saudi Arabia 
in order to equip Gulf-bound workers with working knowledge of Arabic. This will be done in 
cooperation with the King Abdullah International Center for Arabic Language Services, which 
will  help  set  up such  centers  in  all  parts  of  India  to  help  workers  to  fit into  their  respective 
vocations  in  the  GCC  countries.  A  knowledge  of  Arabic  is  expected  to  bridge  the 
communication  gap  between  the  employer  and  the  employees.  It  has  been  pointed  out  by 
officials  that  most  labour  problems  occur  due  to  poor  communication  skills  between  the 
sponsors and employers. The first such centre is expected to open in New Delhi as it is home 
to several foreign missions from Arab countries.35  

-  The  UAE  has  signed  agreements  with  India,  Bangladesh,  Egypt,  Ethiopia,  and  the 
Philippines to get their workers medically tested at home before joining the work market in the 

31 Arab News, 9.12.2014: Pact to hire Indian domestics cleared. 
32 Saudi Gazette, 16.7.2014: SR1,000 minimum pay for Indian maids. 
33 Khaleej Times, 24.11.2014: Ministry of Labour to select, train 2,500 workers. 
34 Gulf Times, 2.12.2014: Indian cabinet okays prisoner transfer treaty with Qatar. 
35 Arab News, 31.12.2014: Centres for crash courses in Arabic to be set up in India. 

DEMO-India RR2015/04 

17 

                                                      
N. Janardhan  

UAE. This is to ensure that prospective workers with pulmonary tuberculosis, hepatitis B and 
HIV/AIDS are tested before they arrive in the country. This, it is reasoned, will stop the spread 
of the latest strains of infectious diseases. Further, it is also been seen as an effective way of 
helping some  workers avoid spending  money to come to the Gulf to work without knowing 
their health condition. In the current scenario, jobseekers with infectious diseases are denied a 
work permit.  

The  Ministry  of  Health  started  implementation  of  a  double  check  medical  screening  for 
citizens of Indonesia and Sri Lanka applying for work/residence permits in 2011. Applicants 
from these two countries are required to visit approved medical centres in their home countries 
and to be tested there for tuberculosis, hepatitis B, HIV, leprosy, malaria and syphilis. Only in 
instances  where  a  valid  medical  certificate  is  issued  with  a  negative  test  result  will  an 
applicant be permitted to apply for an employment entry visa for the UAE. The requirement to 
complete a post-arrival medical check-up in UAE also remains in place.36 

7. Studies on the impact of remittances 

Two controversial reports about the impact of remittances on the workers’ families back home were 
released  during  the  period  under  scrutiny.  The  results  of  both  studies  offer  a  positive  perspective 
compared  to  the  oft-cited  human  rights  reports  which  criticize  the  inhuman  working  and  living 
conditions and other labour violations in the GCC countries. In particular, both reports point out that 
remittances have contributed to poverty reduction. 

The  first  study  suggests  that  Indian  unskilled  workers  are  making  a  crucial  difference  to  their 
families’  living  conditions  back  home.  The  study  by  Michael  Clemens  of  the  Centre  for  Global 
Development  finds that the  workers  were  earning  salaries that  were two-and-a-half  times  more  than 
what  they  would  have  earned  in  India.  The  remittances  they  send  home  were  also  improving  their 
families’ situation. 

“The fact is that Indians moving to work in the UAE have contributed to the reduction of poverty, 
obtained hundreds of thousands of jobs, and provided Indian families with billions of dollars, which 
were  transferred  by  workers  from  their  average  monthly  earnings”.  The  survey  also  found  that  the 
labourers’ families were 30 percent more likely to own their own businesses as compared to families 
with no members working abroad. 

Indian workers who had come to work in the UAE before the global financial crisis of 2008 had 

greater opportunities as compared to workers that came after the crisis, the report found.37  

Another argument that the Gulf countries could point to in order to counter the pressure of human 
rights activists and groups is one put forward by University of Chicago law professor Eric Posner in a 
book entitled The Twilight of Human Rights Law (Posner 2014). In the book and in an article in New 
Republic  co-authored  with  Glen  Weyl,  it  is  argued  that  the  GCC  countries  sponsorship  systems 
contribute significantly to the reduction of global inequality. 

Foreign migrant workers earn vastly more in the GCC nations than they would at home in Bangladesh 
or  India,  where  they  would  make  around  $1,000  per  year.  By  welcoming  migrant  workers,  the  GCC 
countries do more than any other rich country to reduce global inequality. Through migration, Qatar’s 
per-person contribution to the reduction in global inequality is almost three times that which would be 
achieved by eliminating all inequality  in the United States, and  many times that created by taxes and 
transfers  in  any  of  the  rich  countries  that  belong  to  the  Organization  for  Economic  Co-operation  and 

36 Gulf News, 11.11.2014: FNC discusses medical screening in labour-exporting countries. 
37 The National (UAE), 2.2.2015: Families gain from Indian labourers in the UAE. 

18 

DEMO-India RR2015/04 

                                                      
India-related labour issues in the Gulf – November 2013 to January 2015 

Development. If you take into account remittances – in UAE, for example, migrant workers send home 
more than 75 percent of their salary – the reduction in inequality is even greater.  

Migration has such large benefits because people in poor countries start from such a  low base. If you 
give $4,000 to someone  who  earns only $1,000, that person’s income increases  fivefold, dramatically 
reducing inequality. If you give the same amount to a poor person in the United States making $12,000, 
the donation would increase his or her income only by a third. In fact, increasing the income of a truly 
poor person in a poor country by a factor of five is precisely what would allow her access to the basic 
goods,  like  education  and  health  that  are  the  empty  promises  of  human  rights  treaties.  This  is  why 
helping  the  poorest  people  in  the  world  does  so  much  more  to  reduce  global  inequality  than  do  the 
welfare  states  of  OECD  countries,  where  money  is  shuffled  around  between  the  super-rich  and  (by 
global standards) the not-so-poor (Posner and Weyl 2014). 

Posner and Weyl acknowledged the shortcomings in the political systems of Gulf states, but argued 
that  “reducing  inequality  will  require  uncomfortable  trade-offs.  Qatar  would  not  welcome  so  many 
migrant workers if it had to give them generous political and civil rights…”. They further noted that 
the West’s emphasis on human rights and the role of institutions such as the United Nations Human 
Rights Council has failed to pre-empt growing global inequality. 

To top it all, they advocated the adoption of Gulf-style labour systems by Western countries. “If the 
OECD  countries  copied  the  migration  policies  of  the  GCC  countries,  they  would  reduce  global 
inequality by much more than their welfare systems do within their borders,” they suggested. 

However, the arguments of both reports might be countered by pointing out that the studies have 
focused narrowly on financial gains, but not the emotional cost. For example, family life is restricted 
to about two months every twenty four months. Some children then only see their fathers once every 
two years. The study also failed to note whether the community or local village benefitted in any way 
from migration.  

8. Kafala debate 

The kafala or sponsorship system has been widely debated in migration and human rights milieus in 
recent  years.  Though  it  is  not  exclusive  to  the  issue  of  Indians  in  the  Gulf,  but  involves  all  the 
expatriates in the region, developments in this realm are, nonetheless, relevant. 

In  early  2014,  Qatar  proposed  amendments  in  the  country’s  sponsorship  law.  The  government 
announced plans to eventually abolish the kafala system and reform the exit permit system. However, 
it  did  not  set  any  time  for  implementation  of  the  proposed  changes.  It  is  not  clear  how  long  these 
procedures would take and whether the proposals would see further changes during this process. 

The  proposed  change  implies  that  the  current  system  of  Qatari  citizens  or  the  private  sector 
sponsoring expatriates would be replaced with: a government sponsorship system; or a work system 
governed by more formal job contracts between employers and employees. The contracts may specify 
the  role  of  several  parties,  including  the  Ministry  of  Interior,  Ministry  of  Labour  and  the  judicial 
bodies. 

The proposal states that if an employer refuses to approve the exit permit, then the employee can 
refer the issue to the relevant department at the Ministry of Interior and seek a solution in 72 hours.38 
Qatar could also work with the sending countries to start regulated employment agencies to weed out 
corrupt middlemen. 

Qatar’s bid to overhaul its labour sponsorship system is in response to mounting criticism about its 
construction  plans  for  the  2022  World  Cup.  Qatar  hopes  that  these  changes  will  help  “fend  off 

38 The Peninsula, 18.5.2014: Proposed changes to sponsorship spark debate in legal circles. 

DEMO-India RR2015/04 

19 

                                                      
N. Janardhan  

demands  like  the  right  to  form  independent  trade  unions  and  collective  bargaining  that  would 
fundamentally  alter  the  Gulf  state’s  social  structure  in  which  the  citizenry  accounts  for  a  mere  12 
percent of the population…The changes would keep the kafala system in place but would remove its 
most onerous bits. Sponsorship by the government promises that workers would not be exposed to the 
whims of their employers. Freedom to switch employers reduces a worker’s dependency.”39 

In  an  earlier  attempt  to  reform  the  kafala,  Bahrain  became  the  first  country  in  the  GCC  bloc  to 
‘abolish’ the system. Announced in April 2009 and implemented starting August 2009, the new law 
allowed  workers  to  be  sponsored  by  the  Labour  Market  Regulation  Authority  and  change  from  one 
employer to another without their employer’s agreement. A three-month notice was required to quit an 
employer.40 

However, the law has not been enforced strictly. The law ostensibly encourages workforce mobility 
and helps the government to effectively monitor workers’ rights  – which was one of the reasons for 
the change after complaints and criticism from international human rights organisations. But its real 
purpose may have been for the authorities to proactively employ nationals over expatriates. As with 
so many workforce nationalization drives in the GCC countries, the private sector has not welcomed 
this move.  

There has been debate about kafala reforms in other GCC countries too, but it has remained in the 

realm of debate for lack of clarity and for the consequences of alternative systems.  

9. Conclusion 

It is only fair to attempt a concluding note on the labour dynamics in the Gulf without restricting it to 
the Indian scenario.  

Generally, incorporating population policies into overall development strategies continues to pose a 
challenge  for  the  GCC  countries.  The  high  rates  of  population  growth,  emergence  of  new  global 
challenges,  cultural  threats  and  fear  of  damage  to  the  national  fabric  pose  challenges  for  policy 
makers.  Attempts  to  reduce  the  gap  between  the  number  of  nationals  and  expatriates  in  the  GCC 
countries  and  to  speed  up  the  nationalization  of  the  workforce  have  not  had  the  desired  results 
(Janardhan 2012a).  

In  reality,  in  the  wake  of  globalization  and  the  accelerated  pace  of  integration  of  the  GCC 
economies  into  the  global  economy,  the  flow  of  expatriate  workers  will  basically  be  determined  by 
economic factors. This will mean granting rights that the GCC countries are not used to. Though the 
rules  of  engagement  have  constantly  changed  for them,  expatriates  have  been more  of  a  stabilizing, 
rather than a destabilizing, force. This makes it imperative for the GCC governments to take proactive, 
not reactive, measures to address the concerns of expatriates.  

It  is  unlikely  that  expatriates  or  their  governments  will  voluntarily  demand  any  significant 
concessions that would alter the current arrangements. It is also unlikely that the GCC governments 
will  offer  any  concessions  due  to  the  local  sensitivities  involved  and  their  ramifications.  In  such  a 
scenario,  the  nationalization  of  workforces  becomes  an  important  tool  to  address  at  least  one 
component of the ‘threat’ perception.  

However,  the  success  of  this  strategy  depends  on  bridging  the  divide  between  the  academic 
curriculum and market requirements, and making nationals more competitive. This would hasten the 
process of building a vibrant knowledge economy. 

39 Middle East Online, 27.3.2014: Qatar readying to overhaul controversial kafala.  
40 www.bbc.com, 6.5.2009: Bahrain to end ‘slavery’ system. 

20 

DEMO-India RR2015/04 

                                                      
India-related labour issues in the Gulf – November 2013 to January 2015 

While it is true that external influence played a role in bringing about labour reforms, it is also true 
that  wages  and  other  working  benefits  are  determined  by  the  prevailing  conditions  of  labour  supply 
and demand in the market. 

The  GCC  governments  are  in  a  better  economic  position  today  than  they  were  a  decade  or  two 
decades ago – despite the slump in oil prices. As such they are unlikely to compromise any more than 
they  have  done  on trade-labour  issues.  As  a result,  it  would  be  more  fruitful to  adopt a  cooperative 
approach on labour issues rather than a policy of intimidation and confrontation.  

At another level, given the feeling of demographic insecurity, it is unlikely that the GCC countries 
would  take  many  more  steps  to  liberalize  expatriates’  labour  laws  drastically.  Even  incremental 
progress would be reluctantly implemented at the governments’ pace, after taking ground realities into 
consideration. Any major external government push for ‘unreasonable’ change may be construed as a 
challenge to sovereignty, which could have an adverse impact on the expatriate communities.  

A  more  productive  alternative  may  lie  in  foreign  governments  using  the  offices  of  ‘apolitical’ 
institutions like the International Labour Organization and International Organization for Migration to 
impress upon the GCC governments the need to adopt progressive labour policies, to which they may 
be more receptive.  

Further, it is important to note that the GCC governments have largely limited their involvement in 
labour issues to creating a fair regulatory environment for private companies – many of them owned 
by  nationals  –  and  migrant  workers.  Labour  ministries  have  limited  scope  in  enforcing  labour  laws 
strictly.  They  have  no  power  to  force  companies  to  increase  workers’  wages.  At  best,  they  could 
attempt  to  make  sure  that  the  companies  pay  workers  according  to  their  contracts.  And,  here  too, 
excessive supply of labour over demand means that workers are willing to compromise on salaries to 
either get jobs or retain them; government interference is, then, redundant. Since inspections related to 
timely  payment  of salaries  and  provision  of  decent  accommodation have  proved  effective, the  GCC 
governments should push to strengthen them. 

In  such  a  scenario,  it  may  be  worthwhile  for  the  GCC  governments  to  impress  upon  the  private 
sector the need to cooperate by looking beyond the profit motive. The effort should be to encourage 
employers in the private sector to assume more responsibility in ensuring better standards and rights 
for  workers  as  part  of  their  corporate  social  responsibility,  and  even  to  protect  the  image  of  the 
country. It appears that only a combined effort, with the active involvement of the private sector, could 
yield  better  results.  It  is  in  this  way  that  international  institutions  could  help  create  the  required 
awareness among private sector players. 

Finally,  remittances  and  domestic  political  pressure  factors  would  also  continue  to  encourage 
workforce-sending  countries  to  find  solutions.  This  would  involve  devising  mechanisms  aimed  at 
addressing  the  problems  of  and  providing  relief  to  their  people  working  abroad,  even  if  they  have 
minimum impact on many occasions. 

DEMO-India RR2015/04 

21 

 
 
References 

N. Janardhan  

Janardhan,  N.  2012a.  External  influences  on  GCC  labour  market  policies.  In:  Steffen  Hertog  (ed.), 
National Employment, Migration and Education in the GCC, Berlin: Gerlach press, pp. @@@. 

Janardhan, N. 2012b. Boom amid Gloom: The Spirit of Possibility in the 21st Century Gulf , Reading: 
Ithaca Press. 

Posner 2014. The Twilight of Human Rights Law. Oxford, New York: Oxford University Press. 

Posner, E. and G. Weyl 2014. A radical solution to global income inequality: Make the US more like 
Qatar, New Republic (Washington), 6 November. 

National Committee to Combat Human Trafficking,  UAE (United Arab Emirates). 2015. Combating 
Human Trafficking in the UAE: Annual Report 2014. Abu Dhabi. 

Newspaper sources 

Agence France-Presse, 28.11.2014: Gulf, Asia okay steps to protect foreign workers 

Arab News (Saudi Arabia), 2.2.2014: Indian state allocates 500 million rupees for expats 

Arab News, 30.8.2014: No change in Indian housemaids’ recruitment pact 

Arab News, 13.9.2014: 200,000 Nitaqat-hit firms close down 

Arab News, 25.09.2014: Riyadh taking steps to rein in Asian wages 

Arab News, 7.10.2014: Recruitment of 1.2m expats defeating Saudization drive 

Arab News, 13.10.2014: Nitaqat-hit Keralites seek govt assistance 

Arab News, 2.11.2014: Unemployment reaches 27 percent in the Gulf 

Arab News, 25.11.2013: Website launched for Andhra NRIs 

Arab News, 7.12.2014: Center opened to guide Indian expatriates on labour problems 

Arab News, 9.12.2014: Pact to hire Indian domestics cleared 

Arab News, 31.12.2014: Centres for crash courses in Arabic to be set up in India 

Arab News, 29.1.2015: New Nitaqat quotas difficult to implement 

(The) Economic Times (New Delhi), 1.12.2014: India’s highest amount of remittances comes from the 
Gulf 

Gulf News (UAE), 29.10.2013: 600,000 Indian expats eligible for pension in UAE 

Gulf News, 19.12.2013: 141,000 Indians return from Saudi Arabia 

Gulf News, 16.3.2014: Chartered flights for Keralites who wish to vote 
Gulf News, 11.11.2014: FNC discusses medical screening in labour-exporting countries 

Gulf News, 26.11.2014: India begins levying service tax on remittance fee 

Gulf Times (Qatar), 2.12.2014: Indian cabinet okays prisoner transfer treaty with Qatar 

Gulf Times (Qatar), 31.12.2014: 277 Indian nationals died in Qatar in 2014 

(The) Hindu (India), 13.1.2015: NRIs can vote from abroad 

(The) Indian Express, 4.11.2013: Most Indian workers meet Nitaqat deadline, regularise stay in Saudi 

22 

DEMO-India RR2015/04 

India-related labour issues in the Gulf – November 2013 to January 2015 

Khaleej Times (UAE), 11.11.2013: Kerala offers sops to firms recruiting Saudi returnees 

Khaleej Times, 3.1.2014: India, Saudi Arabia ink landmark accord on domestic workers 

Khaleej Times, 8.1.2015: Indian state’s welfare plans to assist expatriates in the UAE 

Khaleej Times, 24.11.2014: Ministry of Labour to select, train 2,500 workers 

Kuwait Times, 15.9.2014: Security deposit for safeguarding welfare of Indian workers 

Middle  East  Online,  27.3.2014:  Qatar  readying  to  overhaul  controversial  kafala,  available  on: 
http://www.middle-east-online.com/english/?id=65068 [Accessed 8 September 2015] 

(The) National (UAE), 2.2.2015: Families gain from Indian labourers in the UAE 

(The) Peninsula (Qatar), 18.5.2014: Proposed changes to sponsorship spark debate in legal circles 

(The) Peninsula, 16.7.2014: Labour complaints in Asian languages allowed 

(The) Peninsula, 27.11.2014: No immediate plan to cut expat workforce, say Gulf ministers 

Press Trust of India, 27.11.2014: Complaints by Indian workers working in Gulf on the rise 

Reuters, 17.11.2014: India urges higher pay for millions of Gulf workers 

Saudi Gazette, 19.3.2014: 1.4m Indians to benefit from new social security scheme 

Saudi Gazette, 27.3.2014: CG launches handbook for Indian workers 

Saudi Gazette, 16.7.2014: SR1,000 minimum pay for Indian maids 

Saudi Gazette, 30.12.2014: 682,000 Saudi women say no to private sector jobs 

www.bbc.com, 
system, 
http://news.bbc.co.uk/2/hi/middle_east/8035972.stm [Accessed 8 September 2015] 

6.5.2009: 

‘slavery’ 

Bahrain 

end 

to 

available 

on: 

DEMO-India RR2015/04 

23