NEW DELHI — The government of the Kingdom of Saudi Arabia ha officially ended decades-old Kafala system regatding labour sponsorship that controlled the lives of millions of migrant workers for more than seventy years.
The reform unveiled in June 2025 as part of Crown Prince Mohammed bin Salman’s ‘Vision 2030’ is a major relief for millions of migrant workers in Saudi Arabia. Among them are more than 2.6 million Indians, according to India’s Ministry of External Affairs (MEA).
The word Kafala, meaning “sponsorship” in Arabic, referred to a structure in which a local employer, or Kafeel, took legal responsibility for a foreign worker’s visa and residency. Introduced in the 1950s during the region’s oil boom, it was initially a way to regulate the growing flow of labour from abroad. This sponsorship or Kafala system system had been in place in Saudi Arabia and much of the Middle East.
To prevent the local economy from being overwhelmed by cheap labour, every incoming worker was ‘tied’ to a kafeel, a sponsor who could be either an individual or a company.
This kafeel held extensive authority over the workers’ lives, deciding their place of employment, controlling their wages, and even determining where they could live.
Over time, the system came to symbolise exploitation and imbalance. Employers often confiscated passports, delayed wages, and restricted travel. Workers could not change jobs, leave the country, or even file complaints without their sponsor’s consent.
Human rights groups described it as “modern-day slavery”. Domestic workers, particularly women, were among the worst affected, facing isolation, excessive hours, and emotional or physical abuse.
The end of this system, observers say, marks a landmark move in Gulf labour reforms, aligning with international human rights standards and responding to long-standing pressures from human rights organisations like the International Labour Organisation (ILO), but it has significantly affected around 2.3 to 2.6 million Indian migrant workers residing and working in the kingdom. In addition,
it is expected to affect nearly 13 million foreign workers overall, with Indians being the largest expatriate worker group.
No matter how exploited they were, and now finally received relief, but due to this system, Indian workers were getting more jobs as compared to other nations, resulting in a record of receiving a high amount of remittance for India. Based on the last reported fiscal year (2023-24), Saudi Arabia accounted for approximately 6.7 per cent of India’s total inward remittances.
For India, the change could transform the experience of its citizens employed in Saudi Arabia’s construction, healthcare, domestic, and service sectors. The MEA said it continues to work with Saudi authorities to ensure that the rights of Indian nationals are safeguarded and that disputes can be resolved more fairly under the new framework.
The decision taken by the government of Sausi Arabia follows sustained international scrutiny and a wider regional shift. Qatar had overhauled its labour rules before hosting the 2022 FIFA World Cup, setting a precedent for other Gulf nations.
