Dubai, Feb 5 (IANS): The shortage of Indian workers has forced around 400 jewellery workshops in Saudi Arabia to shut down with 100 others struggling to survive.

“We now have 100 gold workshops that employ about 5,000 foreign workers, but there are very few skilled workers in the industry following the labour ministry’s decision to reduce the quota to 40 percent,” the Arab News quoted Abdulghani Al-Muhanna, chairman of the gold and jewellery committee of the Eastern Province Chamber of Commerce and Industry in Dammam, as saying.

He said most of the closed workshops had employed illegal workers and had benefited from high gold prices in recent years.

But the introduction of a strict new labour law in the country has driven out many Indian workers.

“The nature of the gold and jewellery sector is different from other sectors. It needs skilled professional workers, otherwise investors and merchants will have to depend on neighbouring countries,” Al-Muhanna said.

He welcomed the country's labour ministry campaign to remove illegal workers from the market, but said the government should now allow more legal workers.

Khaled Al-Amoudi, a member of the Council of Saudi Chambers said Indian workers are sought after in the jewellery industry because of their skills.

After introducing a new labour policy in the country, Saudi authorities had granted a seven-month grace period last year for illegal expatriates to either rectify their residency status or leave the country.

The new Nitaqat or Saudisation policy in that Gulf nation makes it mandatory for all Saudi companies to reserve 10 percent of jobs for Saudi nationals.