End of the Kafala System in Saudi Arabia
Saudi Arabia has announced the abolition of its long-standing Kafala system, a controversial labour sponsorship model.
- The reform was unveiled in June 2025 and is expected to benefit around 13 million foreign workers, including over 2.6 million Indians.
What was Saudi Arabia’s Kafala System?
The Kafala system, meaning "sponsorship" in Arabic, involved a local employer or Kafeel taking legal responsibility for a foreign worker’s visa and residency.
- Introduced in the 1950s during the oil boom to manage foreign labour influx.
Why was the Kafala System Considered Abusive?
Over time, the system became synonymous with exploitation and imbalance.
- Employers often confiscated passports, delayed wages, and restricted travel.
- Workers couldn’t change jobs or leave the country without their sponsor's consent.
- Human rights groups likened it to "modern-day slavery," particularly affecting domestic workers.
Dependence on Foreign Labour in Saudi Arabia
Saudi Arabia's workforce heavily relies on migrants, with about 42% being foreign workers.
- Majority come from countries like India, Bangladesh, Nepal, and the Philippines.
Abolition of the Kafala System
The decision follows international scrutiny and regional shifts, influenced by Qatar’s labour reforms and Vision 2030.
- Vision 2030 aims to modernize society and diversify the economy.
Changes for Migrant Workers
The new system will be contract-based.
- Workers can switch jobs without employer approval and leave the country without exit visas.
- Expanded access to labour courts and complaint platforms for reporting abuse.
Impact on Indian Workers
The reform could transform the employment experience for Indians in sectors like construction and healthcare.
- India's Ministry of External Affairs is working with Saudi authorities to safeguard Indian workers' rights.
