The senior official noted that India has been "concerned over erosion of real wages of all nationalities due to rising inflation, dollar and locked into contract".

At the same time, India felt that wages for labourers of general categories, who have certain protection under local laws, should be "driven by market economy".

Bahrain's booming construction industry, which employs about 275,000 Indians, was hit this month by a spate of strikes by foreign workers, many of them Indians, demanding better wages and living and working conditions.

The Indian embassy had been blamed for the strikes, and employers claimed that Indian workers were encouraged to go on strike expecting a pay rise following a minimum wage notification.

"Some labourers misunderstood those remarks on the new salary scheme, which will be effective from next month, when new contracts come into force," Bahrain's Labour Minister Shaikh Abdulrahman bin Abdulla Al Khalifa was quoted in local media reports on Feb 28.