26 March 2016 07:27:46 IST

Saudi labour curbs on mobile retailing to hit Indians

A Saudi vendor waits for customers at a mobile shop in Riyadh, Saudi Arabia. (Reuters)

Regulatory changes mandate workforce to comprise Saudi nationals only

The Saudi Arabian Labour Ministry’s decision to fully nationalise the mobile phone retail sector in six months, as a fallout of the dip in oil prices, is going to be a big blow to Indian workers, particularly those from Kerala.

NRI sources in Jeddah and Riyadh told BusinessLine that thousands of Indians will lose their jobs when the Saudi Labour Ministry’s new rule takes effect. The Ministry had, two weeks ago, ordered that within three months, half of the staff in the shops selling phones and other mobile telecommunication devices should be Saudi nationals and by September 2, the entire workforce in these shops should be of Saudi nationals. The rule applies to shops and enterprises that offer mobile-phone repair and maintenance services too.

Foreign workers will be totally prohibited from selling and repairing mobile phones and accessories.

The new law is aimed at providing jobs to the unemployed Saudi youth. The oil-rich kingdom has one of the highest unemployment rates in the West Asia region – 11.5 per cent officially, though in reality only two-thirds of the working-age men hold jobs. At the same time, more and more Saudi youths are getting higher education and job skills.

The fall in oil price, to one-fourth of what it was earlier, has hit the Saudi economy really hard, causing a whopping government budget deficit. As a result, the government will not be able to continue with the liberal unemployment dole and other monetary benefits to the jobless.

Sources pointed out that Indians, who make up the largest expatriate community in the kingdom, will be hit the hardest by the new rule. Saudi Arabia, one-third of whose current population consists of foreigners, has close to three million Indians.

Within the Indian community, the largest chunk is those from Kerala. Mobile phone retailing has been one of the fastest growing retail sectors in the kingdom and Indians occupy a sizeable space in the sector.

The Labour Ministry has already serviced notices on the mobile shops and their owners detailing the new regulations. Already, the Labour inspectors have started selectively inspecting shops to send across the message to the employers.