Saudi Arabia’s recent phasing out of the decades-long Kafala (sponsorship) system is a historic milestone for millions of foreign labourers, including more than 2.5 million Indians. This seminal labour reform under the kingdom’s Vision 2030 abolishes the exploitative Kafala system and inaugurates a contract-based labour system that confers vital freedoms and legal protection long withheld from them. The reform seeks to transform Saudi Arabia’s economy, enhance its international human rights reputation, and endow migrant workers with dignity, mobility, and protection against exploitation. Read the complete article to get the full details on the abolishment of the Kafala System & how it will affect Indian workers in Saudi Arabia.
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Latest Updates-
- The Kafala system binds foreign workers’ residence and employment strictly to their Saudi employer sponsors, severely limiting their ability to switch employers, travel, or renew permits without employer approval.
- This system contributed to mass worker abuse, such as wage robbery, passport seizure, and mistreatment, prompting international condemnation, particularly in the lead-up to the 2022 Qatar FIFA World Cup.
- In June 2025, Saudi Arabia announced that this system would be entirely abolished in favour of labour reforms at international standards, rolled out fully by October 2025.
What was the Kafala System?
Begun in the 1950s throughout Gulf Cooperation Council nations, Kafala provided employers with almost complete domination over foreign workers, mainly in domestic service, construction, tourism, and sanitation. The main prohibitions were passport seizure, prohibition on changing jobs or leaving countries without the employer’s consent, and no right to access legal protection or a minimum wage. Indian migrants, among the biggest expatriate communities, experienced poor treatment, delayed payments, exploitation, and denial of return trips home in cases of emergency.
Changes Introduced Under the Kafala System-
- Employees may now switch jobs without restriction after finishing contracts or giving notice, without their employer’s permission.
- Leaving and returning to Saudi Arabia are no longer subject to permits from employers. Worker contracts can now be legally enforced through access to labour courts and grievance redressal mechanisms.
- Better wage protection and working conditions conform to International Labour Organisation standards.
- These changes are designed to eliminate exploitation, enhance employee mobility, and create safer, more equitable job environments.
What will be the Impact on Indian Immigrants?
- Economic Opportunities: Skilled job markets, entrepreneurship, and remittances for host and home countries frequently increased economic opportunities for Indian immigrants.
- Cultural Integration: Indian immigrants enrich multicultural societies through the introduction of Indian festivals, cuisine, languages, and traditions while acculturation to the host country’s cultural principles.
- Educational Advancements: Indian immigrants seek higher studies abroad, resulting in greater professional qualifications and skills transfer to India.
- Social Issues: Indian immigrants can experience discrimination, adjustment problems at the cultural level, and the requirement of support from the community to hold on to their identity and health.
- Influence of Diaspora: The Indian diaspora has a significant influence in enhancing bilateral ties, promoting trade, and projecting India’s image on the global front and its soft power.
Challenges Ahead-
Irregular Implementation in Sectors:
Though most sectors are covered under the new contract-based system, its implementation is irregular, particularly for domestic and informal workers who are still beyond the ambit of comprehensive reform. They are still exposed to coercive employer control and excluded from access to grievance mechanisms.
Employer Non-Compliance and Resistance:
Most employers can be expected to be reluctant to accept the new regulations because of institutionalised power relations and economic dependencies embedded in the Kafala system. There are indications that some companies persist with requiring “no objection certificates” or exit permits—practices officially eliminated by the reform.
Lack of Awareness Among Migrant Workers:
Many foreign workers, especially rural South Asian workers, are not yet aware of their new legal protections or how to use modern digital tools such as Qiwa for labour contracts and complaints. Without effective awareness programs, many might continue to operate under outdated restrictions.
Administrative and Legal Delays:
Saudi grievance systems and labour courts, as reorganised, might experience a huge spike in complaints since workers start asserting their rights. Long case resolution or bureaucratic obstacles might erode confidence in the new enforcement regime.
Potential Informal Retaliation by Employers:
Experts warn that even where legal frameworks are altered, informal retaliation in the form of tardy pay, refusal to make accommodations, or threats of deportation can still exist. These actions may continue to the point of stronger, timely enforcement, which holds people accountable.
Need for Bilateral Cooperation with Labour-Sending Nations:
Successful reform will involve close coordination between the Saudi government and sending countries such as India, Bangladesh, and Nepal. Embassy-level awareness campaigns, joint monitoring systems, and real-time grievance redressal systems need to be in place so that migrant protections translate into reality rather than on paper.
Saudi Arabia’s abolishment of the Kafala system is a revolutionary move towards putting an end to exploitative labor systems and granting foreign workers, particularly Indians, long-deserved dignity and freedom. Though numerous challenges remain, the reform marks an encouraging turn towards a more equitable, inclusive labor environment in the kingdom. This innovative reform will not only better the lives of millions but also raise Saudi Arabia’s reputation as it pursues more international economic integration under Vision 2030.
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FAQs-
A. The Kafala system, or “sponsorship” in Arabic, was a labour model brought in during the 1950s that linked the job and residency of a foreign worker with his/her employer or sponsor (kafeel). Employers could control the visas of workers, changes in employment, travel permits, and even access to law, establishing forced labour-like conditions in most cases.
A. The system was universally criticised by global bodies such as the International Labour Organisation (ILO) and Amnesty International for facilitating exploitation and abuse. The workers were frequently subjected to passport seizure, delayed wages, physical and verbal abuse, and denial of minimum labour rights or legal actions.
A. Saudi Arabia made the official announcement of the abolition in June 202,5 and the reforms became fully effective by October 2025. The reform redefines migrant employment regulations under a contract-based system that provides more freedom and protection to foreign workers.
A. Foreign workers may now change employers upon completion of contract periods or by giving notice, travel outside the country without the need for exit permits, and resort to labour courts in resolving disputes. They also enjoy protection under enforceable contracts under the law and electronic wage monitoring through the Wage Protection System.
A. More than 2.5 million Indian labourers in Saudi Arabia—operating in industries such as construction, healthcare, and domestic employment—will experience greater job mobility, more equitable working conditions, and greater means of legal recourse. It represents a breakthrough in dignity and security for one of the largest expatriate groups in the kingdom.
A. Even with policy advancement, enforcement challenges remain. Compliance is often resisted by many employers, certain sectors continue to be excluded (such as domestic work), and migrant workers are not aware of their renewed rights. Without rigorous monitoring and worker education, some of the old Kafala practices may re-emerge informally.