Saudi Arabia Abolishes Kafala System: Changes for Including 2.6 Million Indians Migrant Workers

Saudi Arabia has abolished the decades-old Kafala system, a controversial labour sponsorship model, benefiting 13 million migrant workers, including 2.6 million Indians. The reform aligns with Crown Prince Mohammed bin Salman’s Vision 2030 and introduces contract-based employment, enabling job changes and travel without employer consent. This transformative move addresses past exploitation and empowers workers with legal protections, marking a significant milestone in labour rights and offering Indian workers a fairer work environment.

Saudi Arabia has taken a historic step by ending the Kafala system, a decades-old labour sponsorship model that governed the lives of millions of migrant workers since the 1950s. This reform, announced in June 2025, is being hailed as a monumental shift in the Gulf nation’s labour policies and is predicted to benefit approximately 13 million foreign workers. Among these, over 2.6 million are Indian nationals, according to data from India’s Ministry of External Affairs (MEA).

Understanding the Kafala System

The term Kafala, meaning "sponsorship" in Arabic, referred to a framework where an employer (known as a Kafeel) assumed legal responsibility for a migrant worker’s visa, residency, and employment status. This system, introduced during Saudi Arabia's oil boom in the 1950s, was initially intended to regulate the influx of foreign labour. However, over time, it evolved into a structure that many criticised for enabling exploitation and abuse.

Why Was Kafala Controversial?

The Kafala system became synonymous with labour exploitation and imbalance of power. Employers often confiscated workers’ passports, withheld wages, and restricted their movement. Many workers were unable to change jobs, file grievances, or even leave the country without their sponsor’s permission. These conditions, coupled with the inability to seek legal recourse, left millions of workers vulnerable to mistreatment.

Human rights organisations likened the system to "modern-day slavery," with domestic workers—particularly women—bearing the brunt of its abuses. They faced extreme isolation, long working hours, and, in many cases, emotional and physical abuse.

Saudi Arabia’s Dependence on Migrant Labour

Saudi Arabia's economy is heavily reliant on migrant workers, who make up nearly 42% of the country’s workforce. Out of a population of approximately 13.4 million foreign workers, many are employed in sectors such as construction, agriculture, healthcare, and domestic services. The majority of these workers hail from South Asian countries, including India, Bangladesh, and Nepal, as well as the Philippines.

For years, international bodies like the International Labour Organization (ILO) and various foreign governments have urged Gulf nations to reform their sponsorship systems, citing their role in enabling forced labour and human rights violations.

Why Now? The Timing of the Reform

Saudi Arabia’s decision to end the Kafala system comes amidst growing international pressure and a wave of regional reforms. In 2020, Qatar set a precedent by overhauling its own sponsorship system ahead of hosting the FIFA World Cup in 2022. This move placed additional scrutiny on other Gulf nations to modernise their labour policies.

The abolition of Kafala aligns with Crown Prince Mohammed bin Salman’s Vision 2030, an ambitious initiative aimed at transforming Saudi Arabia’s economy, diversifying its revenue streams, and presenting a modern, progressive image on the global stage.

Key Changes for Migrant Workers

The new labour framework introduces significant changes to the lives of migrant workers. Under the reformed system, employment will be regulated through contracts rather than sponsorships. Workers will now have the freedom to change jobs without requiring their employer's approval and can leave the country without needing an exit visa or their sponsor’s consent.

Additionally, the reforms bolster access to labour courts and grievance platforms, ensuring that workers can report issues such as unpaid wages or abuse without fear of retaliation. By empowering workers with these rights, Saudi Arabia aims to create a fairer and more transparent labour environment.

Implications for Indian Workers

For the 2.6 million Indians working in Saudi Arabia, the abolition of the Kafala system could be transformative. Indian nationals employed in sectors like construction, domestic work, healthcare, and services are expected to benefit significantly from the increased freedoms and protections under the new system.

India’s Ministry of External Affairs has welcomed the reform and emphasised its commitment to working closely with Saudi authorities to ensure the rights and welfare of Indian workers are safeguarded. The MEA also highlighted the importance of swiftly resolving disputes through the expanded legal frameworks now available to migrant workers.

The end of the Kafala system marks a critical juncture in the fight for migrant workers’ rights in the Gulf. While challenges may remain in implementing these reforms effectively, this move represents a significant step towards addressing historical injustices and ensuring a more equitable future for millions of workers, including a large Indian diaspora.

As Saudi Arabia moves forward with its Vision 2030 agenda, this landmark decision not only modernises its labour policies but also sets a powerful example for other nations in the region to follow. For Indian workers and their families, it brings renewed hope for a more dignified and fair working experience abroad.