Historic Decision by Saudi Arabia: 50-Year-Old ‘Kafala System’ Abolished, Major Relief for 2.5 Million Indian Workers

Riyadh (The Uttam Hindu): In a landmark labour reform, Saudi Arabia has officially ended its 50-year-old Kafala (Labour Sponsorship) System. The move is expected to directly benefit nearly 13 million foreign workers, including around 2.5 million Indians employed in the Kingdom.

The controversial Kafala system had long been under criticism from human rights organizations for giving excessive and inhumane control to employers known as “Kafeels” over their workers.

What Was the Kafala System?

Introduced in the 1950s, the Kafala System was originally designed to regulate the growing number of foreign workers employed in Saudi Arabia’s construction and manufacturing sectors. Under this system, every worker from India or other Southeast Asian countries was tied to a Kafeel — a sponsor, who could be an individual or a company.

The sponsor exercised near-total control over the worker, including confiscating passports, restricting job changes, and deciding when or if the worker could leave the country. Employers often withheld salaries, determined living conditions, and engaged in serious forms of exploitation.

While the system was relatively lenient for skilled professionals or white-collar workers, it turned into a nightmare for many low-wage laborers who had no legal recourse against abuse or exploitation.

Part of Saudi Arabia’s ‘Vision 2030’ Reform Plan

The abolition of the Kafala system comes as part of Crown Prince Mohammed bin Salman’s ambitious ‘Vision 2030’, a multi-trillion-dollar initiative aimed at transforming the Saudi economy, diversifying income sources, and improving the country’s global image.

According to the official statement, the move seeks to empower Saudi citizens, promote transparency, and make Saudi Arabia a global hub for investment and innovation. The reform is also intended to improve labor rights and working conditions for millions of expatriates contributing to the nation’s economic growth.