Asia
The country’s manufacturing sector has welcomed the reforms, however, saying that clearer rules will attract more investment.
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09 Dec 2025 03:59PM
MUMBAI: Lavkush Pandey is struggling to make a living – he earns barely US$200 a month delivering food and groceries for app-based platforms.
On top of that, like millions of fellow gig workers in India, he has no legal entitlement to employment benefits.
He hopes that will finally change under the sweeping labour reforms the government announced last month.
“What if we’re not there tomorrow, who would take care of our families? That’s the reason I ask that the laws the government has come up with benefit poor people like us,” he told CNA.
His predicament illustrates both the promise and uncertainty surrounding the country’s biggest overhaul of labour laws in decades.
The government’s four new labour codes aim to streamline more than 1,400 existing rules into about 350, as well as modernise regulations that date back to the colonial era.
The goal is to formalise India’s vast gig economy, strengthen wage protections, improve access to welfare and bring more women into the workforce.
But implementing these new laws could take months.
Many details, such as rules on minimum wages and easing restrictions on women who work night shifts or in certain factory roles, have not been finalised.
OPPOSED BY TRADE UNIONS
Trade unions, however, have already taken a firm stance against the reforms, fearing the changes could make it easier to fire workers.
Under the new framework, companies with up to 300 workers can retrench staff without prior government approval – a threefold increase from the previous threshold of 100.
Over the past month, New Delhi has seen a wave of protests against the new regulations.
“The labour code is giving away all the worker rights to the corporations. That is the main concern,” one protestor told CNA at a recent demonstration.
Businesses, meanwhile, are scrambling to understand what the transition will mean for them.
Labour law consultant Pankaj Savla said he has been flooded with queries since the rollout.
“Right now, there’s a transition period, so the industries have to see how they can adjust to the provisions that are accommodated under the code. Because there is complete transformation,” he added.
“There is a cushion of three to four months now, so all the organisations can review their existing policies, working culture (and) wage structure.”
Experts warn that smaller businesses will face the biggest challenges in implementing the changes. Many will need to allocate extra resources and budget simply to understand how to comply with the reforms.
The government argues that a more flexible labour market will make India a more competitive investment destination.
While many economists agree, they say these reforms are only one step in a broader series of economic changes needed to fully harness the potential of the country’s billion-strong working-age population.
WELCOMED IN MANUFACTURING SECTOR
The reforms have been a welcome update for many in India’s manufacturing sector, which contributes 17 per cent of the country’s gross domestic product (GDP) and employs about 27 million people.
The industry has long complained about India’s outdated labour laws.
MAN Industries, a major producer of carbon steel pipes, said clearer rules will attract more investment.
“It will bring in more investments because the laws are more crystallised. More clarity and transparency always bring in more business,” said the company’s managing director Nikhil Mansukhani.
He added that while production costs will rise – given that manpower makes up a large share – the overall impact on the industry will be limited.
“(The costs) would just be added on and then be passed on to the customer who buys the pipes from us,” he added.