Nepal–Saudi Arabia sign landmark labour agreement, safeguard Nepali workers

KATHMANDU: Nepal and Saudi Arabia have signed a long-awaited bilateral labour agreement aimed at making the recruitment process more transparent, expanding employment opportunities, and strengthening the protection of Nepali workers in the Saudi labour market. The agreement was signed on Sunday in Riyadh by Nepal’s Minister for Labour, Employment and Social Security Rajendra Singh Bhandari and Saudi Arabia’s Minister for Human Resources and Social Development Ahmed bin Sulaiman Al-Rajhi.

The signing marks the culmination of nearly a decade of negotiations between the two countries. With this agreement, Nepal has now concluded labour agreements with 13 destination countries. Among the Gulf nations, only Kuwait remains without a formal labour agreement with Nepal, while Oman has already reached consensus at the draft level.

Focus on transparent recruitment and workers’ rights

The agreement prioritises transparent and ethical recruitment processes to prevent human trafficking and labour exploitation. It also seeks to ensure mutual respect for the rights and obligations of both workers and employers, in line with internationally recognised labour standards. According to the Ministry of Labour, Employment and Social Security, the agreement has been framed by giving due priority to the labour standards of the International Labour Organization (ILO).

Key provisions address long-standing concerns faced by Nepali workers in Saudi Arabia, including wage protection, elimination of dual contracts, control of excessive recruitment costs, prevention of fraud by recruitment agencies, and improved access to justice for workers. The ministry states that the agreement provides a stronger legal basis to safeguard Nepali workers under Saudi labour law.

Domestic workers issue kept separate

While Saudi Arabia has historically emphasised agreements related to domestic workers, Nepal has consistently pushed for broader coverage of general workers with stronger protection clauses. As a result, the current agreement focuses on general labour, with domestic workers deliberately kept outside its scope. Both sides have agreed to undertake further preparatory work before entering into a separate agreement on domestic workers.

Legal validity of employment contracts

A critical provision of the agreement is the recognition of employment contracts signed in Nepal as legally valid in Saudi Arabia. This is expected to ensure that wages and benefits promised in recruitment contracts are honoured by employers. Nepal has set a minimum salary of 1,000 Saudi riyals for unskilled workers, along with an additional 300 riyals for food expenses, and the agreement is expected to reinforce compliance with these standards.

Joint technical committee for implementation

To ensure effective implementation, the agreement establishes a joint technical committee comprising at least six officials from both countries. The committee will be responsible for monitoring, evaluating, and periodically reviewing the agreement. It will also serve as a formal bilateral mechanism to raise, discuss, and resolve labour-related issues, as well as to recommend improvements during future renewals.

Addressing long-standing challenges

The agreement comes against the backdrop of persistent challenges faced by Nepali workers in Saudi Arabia, including contract substitution, lack of comprehensive insurance coverage, delays in repatriation of deceased workers, and economic exploitation during recruitment. Official data show that in the past two fiscal years alone, 684 Nepali workers died in Saudi Arabia, with most deaths occurring due to cardiac arrest or outside the workplace—often leaving families without compensation due to insurance limitations.

Issues such as the absence of a universally applied minimum wage in Saudi Arabia, lack of 24-hour life insurance coverage, complex procedures for repatriating bodies, and difficulties related to exit permits have long been cited as structural problems. The new labour agreement is expected to provide a formal and legal platform for Nepal to raise these concerns institutionally with Saudi authorities and push for practical solutions through diplomatic and administrative channels.

Strategic importance for Nepal

Saudi Arabia remains one of the largest destinations for Nepali migrant workers and a major source of remittance inflows to Nepal’s economy. The government believes that the agreement will not only open additional employment opportunities but also strengthen Nepal’s institutional capacity to protect its workers abroad.

By formalising labour relations and establishing clear mechanisms for oversight and dialogue, the Nepal–Saudi labour agreement is expected to play a critical role in improving working conditions, reducing exploitation, and ensuring greater security and dignity for Nepali workers in one of the world’s largest labour markets.