Saudi’s Nitaqat Scheme to Hit Indian Migrant Workers Hard

With the slump in oil prices, Saudi Arabia has been looking to diversify its economy and lower its dependence on oil and energy sector.  The revised Nitaqat scheme is part of the government’s plan t to push the  “Saudi First” policy more aggressively. From September 1, only  a handful of organisations with high grades will be able to apply for new block visas for migrant employees. The high grades for organisations — Platinum and High Green — have specific set of criteria, one of them being the number of Saudi nationals employed by them.

Sectors such as construction and hospitality, which have large Indian workforce, are likely to be hit badly. “Others can obtain visas for expat employees only through a transfer of sponsorship. In other words, these organisations will be limited to hiring expat workers who are already in Saudi Arabia and have a work visa with another employer,” according to an immigration alert from EY, a global professional services entity. A majority of Indian workers are blue collar workers.

Organisations employing construction contractors or restaurants are not likely to fall in Platinum and High Green category.  According to Saudi daily Okaz, there are 3 million Indians, 2.5 million Pakistanis, 2.2 million Egyptians, 1.4 million Yemenis and 1.2 Bengalis in the Saudi kingdom. Indians form a majority of the foreign workforce, with the highest number of them coming from states like Bihar, Uttar Pradesh, Kerala and West Bengal.

What is Nitaqat Category?

Introduced in 2011 by Saudi Ministry of Labour, Nitaqat scheme was put in place to encourage employment of Saudi nationals. Under this, employers are divided into four categories — Platinum, Green (with three sub categories of high, medium and low), Yellow and Red. Forty per cent of Platinum organisations have Saudi employees.

The Nitaqat category of an organisation is seen through the following parameters: size and business activity; percentage of Saudi employees and average salary of such employees; retention rate of Saudi employees and percentage of Saudi national employees with high salaries. The last parameter is given much weightage.

The Saudi government has also started sector-specific rules in the recent years. For instance, departmental stores can only hire locals and not migrant workers. According to Saudi media, it will release 20,000 jobs for the Saudi Arabian population as opposed to migrants.