India urges higher pay for millions of Gulf workers

New Delhi/ Dubai/ Riyadh: India is pressing rich countries in the Gulf to raise the wages of millions of Indians working there, in a drive that could secure it billions of dollars in fresh income but risks pricing some of its citizens out of the market.

Over 5 million nationals are believed to be employed in the oil exporting states of the Gulf, the single largest group in a migrant worker population of more than 20 million.

Migrants do many of the dirty and dangerous jobs in the region, from construction to the oil industry, transport and services. They account for nearly half of the roughly 50 million population of the six-nation Gulf Cooperation Council.

So India's campaign for much higher pay could have an impact on economies around the region, especially if it leads to a general increase in wages for workers from other big labour-supplying countries such as Pakistan and Bangladesh.

Over the past seven months, diplomats in Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates have sharply increased the minimum salaries that they recommend for Indian workers at private and public firms in those states.

"We want the Indian workforce to be paid higher salaries. Inflation, the value of the Indian currency and a rise in the cost of living in the Gulf were the factors that led to the decision," YS Kataria, a spokesman for the ministry of Overseas Indian Affairs (MOIA) in New Delhi, said.

The success of India's strategy is not yet clear, however. Officials in at least some GCC nations have expressed displeasure, and the strategy could backfire if those countries end up hiring more workers from elsewhere in the world.

"Of course it will encourage companies to look at Bangladesh and Pakistan as more viable options to get migrant workers," said Mohammed Jindran, managing director of UAE-based recruitment agency Overseas Labour Supply.