Explained: Why did Saudi Arabia end Kafala system? What it means for Indians

In a landmark labour reform, Saudi Arabia has officially scrapped the decades-old Kafala (sponsorship) system that tied foreign workers' employment and residency to their employers. The move, announced in June 2025, which is part of the kingdom's broader Vision 2030 reforms, is expected to reshape the rights of more than 10 million migrant workers, including over 2.5 million Indians.

The Kafala system required foreign workers to have a Saudi sponsor, usually their employer, who controlled their visa and legal status. This meant that workers couldn't change jobs, leave the country, or even renew their residence permits without the sponsor's consent.

Human rights bodies long argued that this system often led to worker exploitation and abuse, as employees were left with little legal recourse if their employers withheld salaries or passports.

The Kafala system drew global attention prior to the 2022 FIFA World Cup in Qatar, as thousands of migrant labourers, mainly from South Asian nations such as India, lost their lives while enduring extremely harsh working conditions during stadium and infrastructure construction.

Under the new labour reform initiative, foreign workers in Saudi Arabia can:

The reform aligns with Saudi Crown Prince Mohammed bin Salman's Vision 2030, which aims to modernise the economy, attract foreign investment, and reduce the kingdom's reliance on oil.

Ending the Kafala system is also seen as a move to improve Saudi Arabia's human rights record and meet international labour standards, particularly those set by the International Labour Organization (ILO).

Saudi Arabia currently has an estimated 1.34 crore foreign workers. They account for close to 42 per cent of the Kingdom's population, as it depends on migrants for construction work, agriculture, domestic work, and more.

A majority of the estimated 1.34 crore workers hail from Bangladesh, India, Nepal and the Philippines.

For the Indian community, one of the largest expatriate populations in Saudi Arabia, the move could bring significant benefits:

However, implementation remains key. Experts say that enforcement and digital systems must be transparent to ensure workers truly benefit from the reforms.

Source: Hindustan Times
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