India urges higher pay for millions of Gulf workers
Wednesday, 19 November 2014 00:00
Reuters: India is pressing rich countries in the Gulf to raise the wages of millions of Indians working there, in a drive that could secure it billions of dollars in fresh income but risks pricing some of its citizens out of the market.
An Indian labourer works at the construction site of a building in Riyadh
Over five million Indian nationals are believed to be employed in the oil exporting states of the Gulf, the single largest group in a migrant worker population of more than 20 million.
Migrants do many of the dirty and dangerous jobs in the region, from construction to the oil industry, transport and services. They account for nearly half of the roughly 50 million population of the six-nation Gulf Cooperation Council.
So India’s campaign for much higher pay could have an impact on economies around the region, especially if it leads to a general increase in wages for workers from other big labour-supplying countries such as Pakistan and Bangladesh.
Over the past seven months, Indian diplomats in Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates have sharply increased the minimum salaries that they recommend for Indian workers at private and public firms in those states.
“We want the Indian workforce to be paid higher salaries. Inflation, the value of the Indian currency and a rise in the cost of living in the Gulf were the factors that led to the decision,” Y.S. Kataria, a spokesman for the Ministry of Overseas Indian Affairs (MOIA) in New Delhi, told Reuters.
The success of India’s strategy is not yet clear, however. Officials in at least some GCC nations have expressed displeasure, and the strategy could backfire if those countries end up hiring more workers from elsewhere in the world.
“Of course it will encourage companies to look at Bangladesh and Pakistan as more viable options to get migrant workers,” said Mohammed Jindran, managing director of UAE-based recruitment agency Overseas Labour Supply.
The Indian government cannot dictate the pay of its citizens in the Gulf - decisions to hire workers are made by labour recruiters in individual countries, which have not set minimum wages for migrants and usually prohibit union activity by them.
However, the recruiters must rely on the co-operation of local authorities to operate in India. An internal memorandum prepared by the MOIA, sent last month and seen by Reuters, says that if workers are offered wages below specified minimums, ministry officials “would deny emigration clearance”.
In Saudi Arabia, the Indian embassy lifted the recommended minimum salary posted on its website to 1,200 riyals ($320) a month earlier this year from 670 riyals. In the UAE, the minimum wage for Indian blue-collar workers rose to 1,500 dirhams ($409) in recent weeks from 1,200 dirhams last year, Jindran said.
Even when Gulf recruiters agree to certain wage levels, the numbers do not necessarily stick. Some workers are promised one salary when they sign up in their home country, then forced to renegotiate lower wages when they arrive in the Gulf.