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RSTV: THE BIG PICTURE- KUWAIT’S EXPAT BILL & IMPACT ON INDIA

RSTV


Introduction:

As many as 7-8 lakh Indians could be forced out of Kuwait if a new bill on expats is enacted into law. The legal and legislative committee of Kuwait’s National Assembly has approved the draft expat quota bill, according to which Indians should not exceed 15 percent of the population. The bill will be transferred to a respective committee so that a comprehensive plan is created. The National Assembly’s legal and legislative committee has determined that the draft expat quota bill is constitutional. The Gulf News reported that ‘this could result in 8 lakh Indians leaving Kuwait, as the Indian community constitutes the largest expat community in Kuwait, totalling 14.5 lakh’. Of the 43 lakh population of Kuwait, expats account for 30 lakhs. Kuwait is also a top source of remittances for India. In 2018, India received close to $4.8 billion from Kuwait as remittances

  • With the Kuwait government deciding to halve the Gulf country’s expatriate population to 30% of the total amid a slump in oil prices and the coronavirus pandemic, around 8 lakh Indians could be forced to leave the country.
  • Kuwait National Assembly’s legal and legislative committee has approved the draft expat quota bill, according to which Indians should not exceed 15% of the population.
  • The bill will now be transferred to the respective committee so that a comprehensive plan is created, according to reports.

India-Kuwait ties:

  • The ties have always had a significant economic and trade dimension. In recent years it has also diversified to include culture, science, and technology, civil aviation, and youth affairs.
  • India has consistently been among the top trading partners of Kuwait. Kuwait has been a reliable supplier of crude oil to India.
  • During 2017-18, Kuwait was the ninth largest oil supplier to India, and it meets about 4.63 percent of India’s energy needs. Bilateral trade with Kuwait during 2016-17 was $5.9 billion, and in 2017-18 it went up to $8.53 billion. In FY19 it grew by 2.7 percent growth to $8.76 billion: while Indian exports were $1.33 billion, imports were $7.43 billion.
  • Exports from India include food items, textiles, electrical and engineering equipment, ceramics, automobiles, chemicals, jewellery, metal products, etc.
  • Importantly, Kuwait is one of the top sources of remittances for India. According to the Ministry of External Affairs data, in 2018, India received $4.8 billion as remittances from Kuwait. According to the Reserve Bank of India, 58.7 percent of total remittances was received by four states: Kerala, Maharashtra, Karnataka and Tamil Nadu.
  • The flow of remittances broadly mirrors the state-wise composition of overseas migrants. The southern states dominated with a combined share of 46 percent in total remittances.

Demographic imbalance:

  • The new draft law is, reportedly, designed to address what Kuwaiti lawmakers have labelled a ‘demographic imbalance.’ Indians are not the only ones affected, with the Egyptian contingent within the nation also now facing grave uncertainty.
  • Although no formal plans over the implementation of the legislation have been drawn up as yet, there have been reports that the country may choose to gradually cut down its expat population over the next few years. Nevertheless, this will have huge implications for the Indian workers employed in the state, many of whom are already suffering from unemployment caused by the COVID-19 pandemic.
  • Kuwait is also a large source of remittances into India. By some estimates, nearly $4.8 billion was received from migrant workers in the nation, into India, in 2018. Given the fallout of the pandemic, coupled with the slump in oil prices.
  • Kuwait, along with other Gulf nations, may no longer be able to heavily subsidise its citizens as they have done in the past, which would then, naturally, translate to putting them to work. This, unfortunately for India’s migrant workers, is likely to come at the cost of expat jobs.

Indian community:

  • According to the Indian Embassy, besides the million-plus who are in the country as legal workforce, there are about 10,000 Indian nationals who have overstayed their visas.
  • The Indian community in Kuwait has been growing at 5-6% per annum until the economic crisis triggered by the COVID-19 pandemic put an abrupt stop to immigration to the country.
  • Indians are the largest expatriate community and Egyptians are the second largest. Three fourths, or about 7.5 lakh Indians are males as against only 2.5 lakh females.
  • It is estimated that 5.23 lakh Indians are deployed in the private sector, as construction workers, technicians, engineers, doctors, chartered accountants, IT experts, etc.
  • About 1.16 lakh are dependents and there are about 60,000 Indian students studying in 23 Indian schools in the country; about 3.27 lakh are domestic workers (i.e. drivers, gardeners, cleaners, nannies, cooks and housemaids) who are not allowed to bring their spouses/children into the country.
  • About 28,000 Indians work for the Kuwaiti government in various jobs such as nurses, engineers in national oil companies, and a few as scientists. In 2018, India received nearly $4.8 billion from Kuwait as remittances

What happens now?

  • Around eight million Indians work in the GCC countries. Around 2.1 million of them are from one State — Kerala. Other major contributors to the Indian expatriate communities in GCC countries are Uttar Pradesh, Tamil Nadu, Bihar, West Bengal, Punjab and Rajasthan.
  • A renewed push for nationalisation of jobs and diversification of expatriates is possible. However, the structure of the GCC economies makes any dramatic change unlikely. Nationalisation of government jobs can be achieved to a significant extent, but the private sector will continue to draw the majority of its workforce from abroad.
  • There is a social stratification in GCC countries that has natives at the top, followed by white professionals from the U.S. and Europe, immigrants from other Arab countries and then others including workers from India.
  • There is a division of labour among these classes and that cannot be changed in a hurry. Replacement of Indian or Asian workers on a large scale is not possible, and native Arabs will not do certain categories of work.