Massive Retirement Crisis Threatens Millions of Indian Expats in the Gulf

A new report shows a big retirement problem for millions of Indian workers in Gulf countries. A report published in August 2026 by the International Labour Organization (ILO) under its STREAM programme, titled Old-age security in the South Asia–Gulf migration corridor, has identified a significant retirement crisis for approximately 9.95 million Indian nationals residing in GCC countries.

• Ministry of External Affairs figures from March 2026 show 4.326 million in the UAE and 2.748 million in Saudi Arabia.
• Migrant workers constitute 76% of the Saudi workforce and 95% of the Qatar workforce.
• The current Gulf labour system assumes short-term residency and leaves long-term workers without public pensions.

How End-of-Service Payments Work

Instead, employees typically receive an End-of-Service Indemnity (EOSI) payment, a lump-sum gratuity based on years of service. Under typical UAE private sector labour laws, this is calculated as 21 days of basic salary per year for the first five years and 30 days per year thereafter, often capped at two years of wages. The ILO report states that this deferred wage structure fails to meet international old-age security standards, as it is often quickly depleted by inflation, healthcare, rent, and family support costs.

Main Challenges for Ageing Workers

The report identifies three primary challenges for ageing migrants: a retirement income gap, the cessation of employer-provided health insurance upon termination, and residency insecurity linked to employment status. While some nations have introduced reforms—such as the UAE's voluntary alternative EOSI savings schemes, provident-fund style models in Oman and Bahrain, and expanded social insurance protections in Saudi Arabia—the ILO notes these remain largely designed for temporary workers rather than multi-generational families. The STREAM programme, active from November 2024 to November 2028, aims to facilitate benefit portability across the six GCC countries and home nations. Demographic trends from MoSPI and the UNFPA suggest that as the population of elderly Indians grows, the burden of supporting retirees returning from the Gulf will increasingly shift to Indian states such as Kerala, Uttar Pradesh, Bihar, Tamil Nadu, Andhra Pradesh, and Rajasthan. The ILO report argues for policy shifts, including mandatory funded savings, post-retirement healthcare access for non-nationals, and retirement-linked residence options to address the insecurity faced by long-term expat families.