Remittances to India dip as Gulf recruits cheap labour
Falling oil prices forces job cuts
NEW DELHI, May 22: The value of remittances from the Gulf countries to India dropped for the second consecutive year to $34.67 billion in 2015.
According to a report published by International Business Times-India Edition on its website Monday, India’s remittances from the region fell as global oil prices crashed and migrant workers faced challenging work conditions in Gulf countries. Remittances reached $35.49 billion in 2013 and fell by nearly half a billion each year since then.
The remittance sending Gulf nations generally include the United Arab Emirates (UAE), Kuwait, Saudi Arabia, Oman and Qatar.
Debasish Mishra, partner at Deloitte Touche Tohmatsu India, pointed out that if crude prices stabilized at $50 a barrel, the inflows of remittance from the Gulf will be stable. However, the Middle East nations are “increasingly encouraging participation of natives in the workforce, to prepare for oil prices to remain at these levels for long term,” he added.
The Saudi government recently announced the roll out of its second phase of Nitaqat Law, which allows for reservation of jobs to native Saudis. Another controversial decision of levying tax on the personal income of migrant workers was also being mulled about. Third, cheap labour from Bangladesh and Nepal are drawing away Gulf employers from costly Indian workers, said the daily.
A survey by GulfTalent, an online recruitment portal in the Middle East, revealed that 14 percent of Saudibased private firms would likely cut jobs in 2016. It said Oman, UAE, Qatar will cut 10 percent, nine percent and eight percent of jobs, respectively, in their economies, putting more pressure on migrant workers.
India’s labour laws trying to fix a minimum wage for Indian workers going abroad to work too might affect the inflow of the corpus, said India bound consultants and recruiting agents. However, the laws have been necessary to contain the exploitation of Indian workers overseas.
As reported by the Business Standard, citing December 2015 figures, in the past year alone 5,900 Indian workers lost their lives, with maximum deaths reported from Saudi Arabia (2,691) and the UAE (1,540). It added that 7,500 Indians complained of exploitation and torture by employers in the Gulf. Kuwait, followed by Saudi Arabia and Bahrain, registered the highest complaints of 3,236, 2,472 and 806, respectively. The Indian missions in Oman, Qatar and the UAE received 413, 378 and 126 complaints each.
Recruiting agencies, however, said the complaints have barely impacted their consultancy business. Wakeel Ansari, president of Delhi’s association of recruiting agents, told the news outlet that there might be genuine cases of harassment but those could happen in any country. “The number of complaints is not even one percent of the 7.3 million Indians residing in the Gulf,” he said, and added that the luxury offered in those places won’t let them return back.