Why is the number of Indian workers heading to Gulf countries declining?

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In the past few years, the number of Indian workers moving to the Gulf for work declined significantly between 2014 and 2016, a news report has revealed. According to the report, this has been due to weaker oil prices causing slower economies in countries forming part of the Gulf Cooperation Council (GCC).

A report in the Times of India, quoted official figures as showing that 775,845 Indian workers immigrated to the GCC countries in 2014 in comparison to 507,296 in 2016.

Remittances from these countries seem to have impacted the reduced number of Indian workers coming in to the Gulf. As recorded in India’s balance of payments, statistics show that between 2014 and 2015, the remittances fell from $69,819 million to $65,592 million.

In terms of number of Indians immigrating, there was almost a 50 percent drop in Saudi Arabia from 329,882 in 2014 to 165,365 in 2016. This sharp decline is due to low oil prices leading to a slowing Saudi economy, said the report.

New taxes

“This is to encourage the private sector to employ greater number of Saudi nationals as well as to reducing reliance on expatriate workers. Further, against the backdrop of declining oil prices, the Saudi government has introduced a number of new taxes/VAT so as to augment the sources of government revenue,” the foreign ministry told Parliament this week.

From this year, Saudi Arabia has begun implying a dependent tax on non-nationals residing in the country. “The tax rate on each dependent. It will be increased to SAR 200 in 2018, SR 300 in 2019 and SR 400 in 2020 per dependent member of the expatriate family,” Saudi government said.

According to official figures, there are around 3 million Indians in Saudi Arabia but do not show any noticeable impact on Indians there. “Indian officials had, however, raised the issue with a visiting Saudi delegation on July 11”, the MEA told the House.

In Bahrain, a construction company employing nearly 1,500 Indians laid off around 700 workers but was unable to repatriate them after clearing their dues due to the financial crisis. Indians also get tricked by fake recruiting agents and mistreated which are some of the reasons why the numbers are decreasing.