Four new labor laws will come into force as India seeks to attract investment and strengthen its manufacturing sector.
Published November 21, 2025
India has announced a series of sweeping labor reforms, saying it will implement four long-delayed labor codes that the government says will modernize outdated regulations and extend stronger protections to millions of workers.
Prime Minister Narendra Modi said on Friday’s X show that the review will provide “a solid foundation for universal social security, minimum and timely wage payment, safe workplaces and reward opportunities.”
Recommended stories
list of 3 itemsend of list
He said the changes would spur job creation and improve productivity across the economy.
The Ministry of Labor echoed that message, saying the reforms would “place workers, especially women, young people, unorganized casual workers and migrant workers, firmly at the center of labor governance” with expanded social security and portable rights that apply across the country.
The government says replacing 29 piecemeal laws with four unified statutes covering wages, industrial relations, social security and occupational safety will simplify compliance and make India more attractive for investment.
Many of India’s existing labor laws date back to British colonial times and have long been criticized by businesses as complex and inconsistent, creating barriers to scaling up manufacturing, which accounts for less than 20% of India’s roughly $4 trillion gross domestic product.
The new rules formalize changes approved by Congress in 2020 but stalled for years due to political resistance and pushback from some states and unions.
This reform will bring significant changes to the way factories operate. Women can now legally work night shifts, companies have more leeway 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 say this flexibility will allow employers to expand without fear of lengthy bureaucratic delays.
For the first time, the code also defines gig and platform work, provides legal recognition, and extends social protection to a rapidly growing segment of the workforce.
According to government estimates, the number of gig economy workers could reach more than 23.5 million by 2030, a significant increase from around 10 million in 2024/25.
Economists say the changes may initially put a strain on small and informal enterprises, but could strengthen household incomes over time.
“While it may hurt small unorganized businesses in the short term, in the long term… minimum wages and expanded social security could benefit both working conditions and consumption,” Devendra Kumar Pant of India Ratings and Research told Reuters.
However, trade unions remain fiercely opposed. Amarjeet Kaur, president of the All India Trade Union Congress, said: “The labor law, which has been implemented despite strong opposition from trade unions, will deprive workers of their rights, including fixed-term employment and the rights they had under the previous labor law.”
