Saudi Arabia Abolishes Kafala System What It Means?

In a historic reform, Saudi Arabia has abolished the kafala system, a long-criticised labour framework that governed millions of foreign workers, including a large Indian diaspora. The kafala system, often compared to modern-day slavery, restricted workers’ mobility, job flexibility, and legal protection. This move, announced in June 2025 and implemented in October, is a major milestone in the Kingdom’s push under Vision 2030 to modernise its economy and human rights record. For Indian workers, who make up a significant portion of Saudi Arabia’s migrant labour force, this change offers long-overdue dignity, freedom, and protection from systemic abuse.

What Was the Kafala System?

The kafala (sponsorship) system was introduced in the 1950s across most Gulf Cooperation Council (GCC) countries. It allowed employers (kafeels) to exercise near-total control over foreign workers, particularly those in domestic work, construction, hospitality, and sanitation.

Key restrictions under kafala included,

• Seizure of passports by employers
• No freedom to change jobs without employer consent
• No right to exit the country without written approval
• Limited access to legal or labour protections
• No minimum wage or union rights for many sectors

This created a severe power imbalance, often trapping workers in exploitative, abusive, or unsafe conditions with little recourse.

Impact on Indian Migrant Workers

Indians are among the largest expatriate communities in Saudi Arabia, with over 2.5 million residing and working in the country. For decades, Indian blue-collar workers have faced,

• Passport confiscation
• Wage theft or delayed payments
• Physical and psychological abuse
• Inability to return home during emergencies

Women domestic workers have been especially vulnerable due to isolation and lack of legal safeguards. The change in policy is thus being hailed as a breakthrough for basic labour rights and human dignity for these workers.

Key Reforms Replacing Kafala

Saudi Arabia’s new policy replaces the kafala system with a contract-based labour system, bringing significant changes,

• Freedom to change jobs without sponsor approval
• Exit without exit visa or kafeel’s permission
• Legally enforceable employment contracts
• Access to labour courts and grievance redressal mechanisms
• Improved wage protection and working conditions

This aligns Saudi Arabia with international labour standards promoted by the International Labour Organization (ILO), which had long criticised the kafala framework.

Vision 2030 and Global Scrutiny

The reforms are part of Crown Prince Mohammed bin Salman’s Vision 2030 strategy — a blueprint to diversify the Saudi economy, reduce oil dependence, and improve the country’s global image.

The Kingdom has faced mounting pressure from,

• Human rights organizations, such as Amnesty International and Human Rights Watch
• International labour bodies, including the ILO
• Media and cultural depictions, like the Malayalam film Aadujeevitham, which highlighted real-life migrant worker abuse
• The move also follows similar action by Qatar, which dismantled parts of its kafala system ahead of the 2022 FIFA World Cup.

Challenges in Implementation

While the abolition is a major policy shift, experts caution that effective implementation and monitoring are key. Concerns include,

• Ensuring employers comply with new rules
• Educating workers about their new rights
• Preventing informal reinstatement of kafala practices under new names
• Empowering labour courts to act swiftly on complaints

India and other labour-sending nations must work closely with Saudi authorities to ensure that migrant protections are not just promised but practiced.