Four new labour codes come into force as India seeks to attract investment and strengthen manufacturing.
Published On 21 Nov 2025
India has announced a sweeping set of labour reforms, saying it will implement four long-delayed labour codes that the government says will modernise outdated regulations and extend stronger protections to millions of workers.
Prime Minister Narendra Modi said on X on Friday that the overhaul would provide “a strong foundation for universal social security, minimum and timely payment of wages, safe workplaces and remunerative opportunities”.
Recommended Stories
list of 3 itemsend of list
He said the changes would spur job creation and lift productivity across the economy.
The labour ministry echoed that message, saying the reforms place “workers, especially women, youth, unorganised, gig and migrant workers, firmly at the centre of labour governance”, with expanded social security and portable entitlements that apply nationwide.
The government says replacing 29 fragmented laws with four unified codes covering wages, industrial relations, social security and occupational safety will simplify compliance and make India more attractive for investment.
Many of India’s existing labour laws date back to the British colonial era and have long been criticised by businesses as complicated, inconsistent and a barrier to scaling up manufacturing, an industry that still accounts for less than 20 percent of India’s nearly $4-trillion gross domestic product (GDP).
The new rules formalise changes approved by parliament in 2020 but stalled for years due to political resistance and pushback from several states and unions.
The reforms introduce significant shifts in how factories operate. Women can now legally work night shifts, firms have greater room to extend working hours, and the threshold for companies requiring prior approval for layoffs has been raised from 100 to 300 workers.
Union opposition
Officials argue this flexibility will encourage employers to expand operations without fear of lengthy bureaucratic delays.
For the first time, the codes also define gig and platform work, offering legal recognition and expanding social protection to a fast-growing segment of the labour force.
Government estimates suggest the gig economy could reach more than 23.5 million workers by 2030, up sharply from about 10 million in 2024/25.
Economists say the changes may initially strain small and informal firms but could strengthen household incomes over time.
“In the short term, they may hurt small, unorganised firms, but in the long run … with minimum wages and increased social security, it could be positive for both working conditions and consumption,” said Devendra Kumar Pant of India Ratings & Research, speaking to the Reuters news agency.
Trade unions, however, remain fiercely opposed. “The labour codes have been implemented despite strong opposition from the trade unions and it will snatch the workers’ rights, including fixed-term jobs and rights available under the earlier labour laws,” said Amarjeet Kaur of the All India Trade Union Congress.
