Israel Reconsiders Ban on Private Construction Labor from India and Sri Lanka

Government ministries are reportedly working to convene a director-generals committee to reconsider a contentious decision to halt the private recruitment of construction workers from India and Sri Lanka starting in 2027. The Population and Immigration Authority announced the ban last month over global concerns regarding human trafficking in those nations, creating severe anxiety within Israel's construction sector.

The sudden policy shift rattled contractors who rely heavily on India and Sri Lanka for skilled labor. While the authority suggested alternative countries such as Uzbekistan, Azerbaijan, Italy, Vietnam, and Romania, contractors warn that establishing new recruitment pipelines is lengthy and threatens continuity. Housing Ministry Director-General Yehuda Morgenstern urged Prime Minister's Office Committee head Drorit Steinmetz to expand private quotas by 20,000 workers, reduce fees, and adopt a hybrid recruitment model.

The Builders Association, led by Yigal Slovik, also pressed ministries to keep the Indian and Sri Lankan channels active until a viable alternative is established. Slovik cautioned that abrupt regulatory changes could disrupt labor supplies, inflate project financing costs, and delay delivery times. The industry currently faces a shortage of roughly 20,000 workers, compounding hardships following the exclusion of Palestinian laborers after the October 7 attacks.

Data indicates that between 2023 and 2025, the average construction time for a residential apartment increased by approximately 5.1 months, exposing developers to lawsuits and higher financing expenses. Although housing starts climbed to roughly 80,000 units in 2025, completion figures stagnated at around 60,000, illustrating a severe bottleneck in the execution phase.