Saudi Arabia implementing a new labor law, Nitaqat, has fueled some uncertainty in the Indian expatriate community that this will hit them pretty hard. The new law seeks to reserve 10% jobs for locals, requiring companies to hire one Saudi national for every 10 expatriates. More than 1.5 million Indians work in Saudi Arabia, of whom around 85% are in the blue-collar category, and predominantly from the states of Kerala & Andhra Pradesh. Their inward-remittances touch upwards of US$ 3.5 billion annually, making it the largest inward flow of foreign exchange from any single country. In the aftermath of the Arab Spring, which saw the overthrow of regimes in Egypt and other countries in the Middle East and North Africa, the Saudi monarchy has been making a renewed push to reduce unemployment, which is said to hover around the 12% level today, meaning nearly 6,00,000 people were without jobs. A large number of Indian workers are employed in Saudi Arabia and according to 2011 data, this includes around 5,70,000 Keralites who account for a total remittance of INR 55,000 Crore.

The Indian government, however, maintains that there is no reason for panic. The government said it was concerned but not paranoid about the new labor law, Nitaqat, and added that the matter was being sorted out with Saudi authorities, while maintaining that Saudi Arabia was mostly acting against those who had stayed back in the country
illegally. The government also denies that there had been a significant increase in the number of Indians returning. “There is an ongoing dialogue with the Saudi government. Overseas Indian Affairs minister Vayalar Ravi is also visiting Saudi Arabia to convey India’s apprehension about possible job losses to Indians due to the new law.

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