How will Saudi Arabia abolishing Kafala system help millions of Indian migrant workers?

Saudi Arabia has officially abolished the country’s 50-year-old Kafala system. The removal is set to liberate more than 13 million foreign workers which including millions from India.

The decision was first announced in June 2025 and marks a historic step for the country that is aiming to enhance migrant welfare for the first time. The decades-old, controversial system had governed the lives of foreign workers in many GCC countries.

What is the Kafala system?

Kafala, meaning sponsorship in Arabic, was the word used for the system where employers were given near-total control over their employees in the Gulf.

The foreign workers' legal status would be completely tied to the their Employer or sponsor, called Kafeel. The company or employer had rights to control where the workers resided, where they were employed or whether they could change jobs and their ability to seek legal help in the country.

Widespread abuse has been reported over the decades under the system, and human rights organisations have said that it was a form of “modern-day slavery”.

Most of the workers who have been subject to the framework have been from India, Bangladesh, Nepal, and the Philippines.

The system was introduced in 1950 to regulate the influx of migrant workers in the Gulf Cooperation Council (GCC) countries under the oil boom. The economies of the countries benefited from the cheap labour that was made available by the system. The system was also designed to avoid granting permanent residency or citizenship to the workers.

How does it change migrant workers' rights in Saudi Arabia?

In the new framework, the country will begin using a contract-based employment system designed to give the workers more independence. Migrant workers will now be able to change their jobs without approval from their current employer.

They can also leave the country without an exit visa or their sponsors' consent, which would end the restriction that often traps workers under abusive employers.

Additionally, the workers' rights to labour courts and complaint mechanisms have been expanded, which will enable them to report violations and abuse.

The reform is part of Crown Prince Mohammad Bin Salman’s 2023 plan to diversify the economy and modernise Saudi Arabia to improve its global reputation.

Qatar had also introduced changes to its labour laws before holding the 2022 FIFA World Cup.

Middle East