An association of contractors in Saudi Arabia has rejected a bid by the Indian government to increase wages for its workers in the kingdom, a report said.

The move could stall construction projects and force some companies out of the market, added the Zawya Projects News, citing media reports.

"The contractors committee rejects India's decision to raise the minimum and maximum wages for its workers in Saudi Arabia without prior coordination,” Abdulhakeem Al Ammar, chairman of the Contractors Committee at the Chamber of Commerce and Industry in the Eastern Province was quoted as telling the Arabic daily Alyoum.

“We call for the abolition of this increase which will hit projects based on previous worker wages," he added.

"Raising the minimum wages for Indian construction workers will adversely affect growth and cause stalling of projects. This will hurt the small and medium companies and could eventually force them out of the market, which, in turn, will obstruct plans to find jobs for Saudis," Al Ammar explained.

According to the daily, the Indian embassy in Riyadh seeks SR1,700-SR3,500 ($453-$933) for skilled labour and SR1,200-SR1,700 ($320 - $453) for unskilled workers.

The new minimum wage for the unskilled labour is nearly 71 per cent above the existing average wage of SR700 ($187), the report said.