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14 August 2015, Gateway House

India-GCC: Oil for jobs

The jobs of 6.5 million Indians working in GCC countries could be at risk due to the fall in global oil prices. Securing the interests of these workers should be on Prime Minister Modi’s agenda when he visits UAE on August 16-17

Fellow, Energy & Environment Studies Programme

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The fall in petroleum prices over the past year has so far benefitted India. However, the economic impact of continued weakness in oil prices may eventually affect the 6.5 million Indians working in the six Gulf Cooperation Council (GCC) states — just as it did in 2008, when, during the global financial crisis, workers lost their jobs. Securing the interests of Indian workers in West Asia should be on Prime Minister Narendra Modi’s agenda during his visit to the United Arab Emirates (UAE) on August 16-17.

In the current environment, there are two primary concerns: working conditions and job security.

The working conditions of Indians in West Asia  have long been a  concern, for two groups in particular — workers in the construction sector and those working as household staff.

In Qatar, a number of construction workers—mostly from India and Nepal — working on projects linked to the 2022 FIFA World Cup – died on the job. Between 2010 to July 2015, a total of 1,387 Indian workers have died in Qatar. The International Trade Union Confederation has identified poor working conditions to be one cause.  Workers are forced to work in extreme summer heat, with no labour rights, which translate into  discriminatory wages. Their freedom of movement is restricted due to the Kafala system used by several countries in the region to monitor migrant workers, particularly construction workers. This is an issue Gateway House has also highlighted in the past.

Similar issues bedevil Indian domestic workers, particularly women who are vulnerable to exploitation in countries such as Saudi Arabia, where they enjoy fewer rights compared to men. Common complaints include excessive work load, not getting days off, not being paid on time and sexual harassment.

India recently negotiated an agreement with Saudi Arabia, which includes some protections for domestic workers such as a minimum wage. Saudi Arabia has entered into similar agreements with Sri Lanka and the Philippines. However, these safeguards are incomplete, and much remains unaddressed like the right of workers to retain their passports and be free to move jobs and cities. When the drop in oil revenue begins to hurt other segments of the Gulf economy, some of India’s migrant workers may find themselves without work. India faced this prospect during the 2008 financial crisis as well when construction activity in Dubai ground to a halt and jobless workers returned to India. India is the world’s fourth largest consumer of petroleum and imports close to 3 million barrels per day of crude oil — 42% of which come from GCC members. It is also one of the few large consumer countries where demand is expected to increase substantially.

In the current scenario then, buyers have more leverage in the global oil market. Increased shale oil production in the U.S. has meant oil exporters such as Venezuela, Angola, and Nigeria are seeking new buyers. Meanwhile, Iranian oil is expected to soon return to the market and Iraq’s oil production has also been increasing consistently. The growing demand of crude oil from India is therefore welcome. In return for a commitment to source a significant chunk of its oil needs from the GCC, India can seek two concessions:

  1. Better working conditions for Indian workers, especially in construction and households such as a minimum wage, sufficient rest periods and minimized exposure to the extreme heat during construction.
  2. A higher quota for Indian workers (and for those from friendly neighbours such as Nepal, Sri Lanka and Bangladesh) for projects in the GCC compared to what they have at present.

As a large consumer with growing demand in a surplus market, India must realise ts own strengths, and use this status to seek better terms for Indians working overseas.

Amit Bhandari is Fellow, Energy & Environment Studies, Gateway House.

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