Saudi Arabia- India relations
This is a collection of articles archived for the excellence of their content.
Indian workers in Saudi Arabia
2017, Sept, Only Few Organisations Get Block Visas
From Sept, Only Few Organisations Will Get Block Visas
Saudi Arabia's revised Nitaqat (or Saudisation) scheme does not bode well for Indian migrants. From September 2017, only a handful of organisations with high grades -based on number of Saudi nationals employed by them and other criteria -will be able to apply for new block visas for migrant employees.
In 2016, there were nearly 25 lakh Indians working in Saudi Arabia, according to a reply in Lok Sabha.
However, migration numbers are declining.There were only 1.65 lakh emigration clearances for Saudi Arabia in 2016, a decline by 46% from 2015. Top origin states in 2016 were Uttar Pradesh, West Bengal and Bihar with Kerala being a distant fourth.
The revised Nitaqat scheme, aimed at increasing employment opportunities for Saudi nationals, will cover private companies with six or more employees (as opposed to current criteria of 10 or more).
Only organisations in the `Platinum' and `High Green' categories will be eligible for new block visas.Construction and hospitality, sectors which have a predominantly blue collar Indian workforce, are unlikely to gain from such rules.
“Others can obtain visas for expat employees only through a transfer of sponsorship. In other words, these organisations will be limited to hiring expat workers who are already in Saudi Arabia and have a work visa with another employer,“ said an immigration alert from EY, a global professional services entity.
“A majority of Indian workers are blue collar workers,“ said an immigration expert.
“Organisations employing them -such as construction contractors or restaurants -are unlikely to fall in platinum and high green category .The added complexity is that workers already employed in companies falling in low categories cannot be transferred from one employer to another.It's currently unclear how employment needs of these sectors will be met in the future,“ he added.
The Nitaqat system was first introduced in mid-2011 to encourage employment of Saudi nationals. Employers are divided into four categories, Platinum, Green (with three sub categories of high, medium and low), Yellow and Red. Those in Platinum have a higher proportion of Saudi nationals as employees (generally 40% or more).
To determine an organisation's Nitaqat category, parameters used include: size and business activity; percentage of Saudi employees and average salary of such employees; retention rate of Saudi employees and percentage of Saudi national employees with high salaries. Highest weightage in computation is given to number of Saudis (ie: locals) employed by an organisation.
Saudi Gazette, an English newspaper, citing the Saudi labour force survey results, wrote the number of non-Saudi employed persons for the first quarter of 2017 reached 108.5 lakh, nearly 78% of the total employed, which is 139 lakh.This report added that majority of foreign workforce comprised of Indians (30 lakh), Pakistanis (25 lakh) and Egyptians (22 lakh).
In recent years, the Saudi government has also begun to introduce some sector-specific rules. For instance, departmental stores can only hire locals and not migrant workers.This step, according to Saudi newspapers, will release 20,000 jobs for the local population.
Saudi Arabian impact on India’s economy
India wants to see oil prices at about $50 a barrel while Saudi Arabia is said to be aiming for oil near $80 Saudi Aramco, has agreed in principle to join proposed 1.2 million barrel a day refiner - Ratnagiri Refinery & Petrochemicals India imports about 80% of its crude requirements
Oil’s rally to $70 a barrel is threatening to clip India’s economic wings at a time when Saudi Arabia is looking to join a $30 billion refinery project in the world’s fastest growing market.
India wants to see prices at about $50 a barrel in order to manage its finances better, Oil Minister Dharmendra Pradhan said in an interview. Meanwhile, Saudi Arabia -- which is said to be aiming for oil near $80 to pay for its own crowded policy agenda -- is planning to sign a deal to participate in a refinery on India’s west coast as part of its strategy to secure sources of consumption for its crude.
While the Modi government reaped the benefits of the biggest price crash in a generation during its first term in power, oil is recovering as the government gears up for elections in 2019. Saudi Arabia, the world’s biggest crude exporter, is preparing for an initial public offering of its state-run producer and leading efforts by OPEC to curb output and eliminate a global glut that spurred oil’s decline.
“We are a very price-sensitive consumer,’’ Pradhan said on Tuesday. “From Indian consumers’ point of view, I will be more than happy if the price is around $50 a barrel.’’ Saudi Arabian Oil Co., known as Saudi Aramco, has agreed in principle to join a proposed 1.2 million barrel a day refiner on India’s west coast, he added.
Saudi Aramco’s Chief Executive Officer Amin Nasser will sign a memorandum of understanding on Wednesday for the project with RRPC, or Ratnagiri Refinery & Petrochemicals, a consortium consisting of state-run refiners Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, said a person familiar with the matter who asked not to be identified before an official announcement.
Aramco may take a 50 per cent equity stake in the project and can bring in another strategic investor, the person said. Nobody immediately replied to an email seeking comment sent to Aramco’s press office outside regular business hours.
“Things are on the table, we are discussing with each other,” Pradhan said, referring to Saudi Arabian participation in the project. “It has to be a win-win situation for both. It must be acceptable to them, it must be profitable for me also.’’ He confirmed on Wednesday that a preliminary deal will be signed with Aramco.
Saudi Arabia has been edged out as the top oil supplier to India amid an intensifying race among producers to retain their most-prized markets. India, which imports about 80 per cent of its crude requirements, has been diversifying its sources of oil supply and is seeking more favorable terms from producers in the Middle East.
The potential partnership in India would be an extension of Aramco’s strategy to lock up market share by investing in refineries in Asia, the region that’s driving global oil demand growth. Over the last few years, the Middle East kingdom has committed billions to projects in Malaysia and Indonesia, as well as a new refining and petrochemical plant in China.
Saudi Arabian Energy Minister Khalid Al-Falih is scheduled to speak at the 16th International Energy Forum in New Delhi this week, along with other Middle Eastern countries’ ministers.
2019: Strategic Partnership Council
NEW DELHI: From purely a buyer-seller relationship, India and Saudi Arabia are now moving towards a closer strategic partnership that will include Saudi investments in downstream oil and gas projects, Prime Minister Narendra Modi said as he began his official visit to the kingdom.
“During this visit to Saudi Arabia, we are going to sign an agreement on a Strategic Partnership Council, which will begin a new era of cooperation across sectors. Our ties across various dimensions such as trade, investment, security and defence cooperation are robust and deep, and will only strengthen further,” Modi said in an interview to Arab News.
In his keynote address at the Future Investment Initiative summit in Riyadh, Modi listed the attractiveness of the Indian economy and invited global businessmen to invest in the country.
“Political predictability, stability of policies and a large diverse market will ensure that your investment in India will be most profitable,” Modi said promising that he and his team will help investors.
He said the government had undertaken major reforms and would continue to take measures to boost growth. He said the roadmap for $5 trillion economy is ready. The PM highlighted India’s sharp improvement in the World Bank’s ‘Ease of Doing’ business ranking where it had reached to 63rd position from 142 within five years.
In his interview, the PM said India imports around 18% of its crude oil from the kingdom, making it the second-largest source of crude oil for the country.
“We value the kingdom’s vital role as an important and reliable source of our energy requirements. We believe that stable oil prices are crucial for the growth of the global economy, particularly for developing countries,” said Modi, during a visit that highlights the government’s success in deepening ties and ensuring Riyadh does not back Pakistan on issues affecting India.
“Saudi Aramco is participating in a major refinery and petrochemical project on India’s west coast. We are also looking forward to the participation of Aramco in India’s strategic petroleum reserves,” the PM said. Modi said one of the major areas of cooperation between India and Saudi Arabia is in investments in infrastructure projects. “During his visit to India in February 2019, the crown prince had indicated an intent to invest in excess of $100 billion in India across various sectors,” he said.
“We welcome greater Saudi investments in our infrastructure projects, including the smart cities programme. We also welcome Saudi interest in investing in the National Investment and Infrastructure Fund,” said the PM.
Modi said Asian powers like India and Saudi Arabia share similar security concerns in their neighbourhood and expressed satisfaction about the two countries’ cooperation, particularly in the field of counter-terrorism, security and strategic issues. “We have a joint committee on defence cooperation that holds regular meetings. We have identified a number of areas of mutual interest and cooperation in the field of defence and security,” he said.
“We are also in the process of entering into agreements on security cooperation, collaboration in defence industries, and also agreed to hold a comprehensive security dialogue mechanism between the two countries,” said Modi.