Nitaqat law

2 min read

News:Indian employees in Saudi Arabia have been living in labour camps after Saudi government has listed several companies in the ‘Red’ category after they failed to implement the Nitaqat law.

Facts:

About Nitaqat law:

  • The Nitaqat  is a policy enacted in 2011 by the Saudi government in order to reduce the unemployment rate among Saudi citizens. 
  • This policy makes it mandatory for Saudi Companies to reserve 10% of jobs for Saudi nationals.

How Nitaqat work? 

  • ‘Nitaqat’ which means ‘Ranges’ classifies Saudi labor market into following ranges
  • Excellent : establishments which have highest localization ratio in their workforce 
  • Green: establishments which have high localization ratio Yellow : low localization ratio 
  • Red : lowest localization ratio.
  • The establishments which will be in Excellent and Green ranges will have advantages and rewards while those in Yellow and Red category will be under pressure to comply with the law.

India’s concerns over this policy:

  • At present over a million Indian nationals are working in Saudi Arabia. Hence,the implementation of this law has lead to job losses and reduced job opportunities for Indians.