A Bahraini company, which allegedly did not give written contracts to its employees, has been blacklisted by the Indian embassy in Manama.
Indians have been forbidden from working for the company, while the allegations are being investigated by the embassy and Labour Ministry officials.
Indian ambassador Balkrishna Shetty issued the notice after a former employee of the firm presented evidence.
The 33-year-old Indian marine geologist was arrested last week after the company filed a case against him for allegedly stealing computer memory chips containing vital information about the business.
He has charged that the firm does not have a written or signed agreement with any of its 15-18 employees and has refused to make contracts despite repeated requests by workers.
Two other Indian employees, who have been working for it for almost four years, have said they were still waiting to sign a employee contract.
"The company has been blacklisted by the Indian Embassy based on the fact that it has not been maintaining any written agreement with any of its Indian employees, which is against Bahraini law and Indian nationals are urged not to take up employment with this firm," Shetty was quoted as saying by the Gulf Daily News.
The embassy will pass the company's name to labour authorities in India, so that potential recruits can be forewarned.