India Enacts Sweeping Labour Overhaul: Four Codes Replace 29 Laws and Recognise Gig Workers

India has moved to implement a major overhaul of its labour framework by bringing four consolidated labour codes into effect. The government says the reforms will modernise outdated rules, expand social security, and simplify compliance for employers while extending protections to millions of workers.

Key changes at a glance

Consolidation: Twenty-nine fragmented labour laws have been merged into four unified codes covering wages, industrial relations, social security and occupational safety.

Stricter thresholds and greater flexibility: The requirement for prior government approval for layoffs has been raised from 100 to 300 workers. Firms will have more scope to extend working hours.

Women and night work: Women are now permitted, under the codes, to work night shifts with accompanying safeguards.

Gig and platform workers: For the first time, the codes define and recognise gig and platform work, making this fast-growing segment eligible for expanded social protection and portable benefits.

Government rationale and expected effects

Prime Minister Narendra Modi said on social media that the reforms will build “a strong foundation for universal social security, minimum and timely payment of wages, safe workplaces and remunerative opportunities.” Officials argue the changes will encourage employers to expand operations by reducing procedural delays and simplifying compliance.

Those implementing the codes say the consolidated framework will make India more attractive to investment and help scale up manufacturing, which still represents less than 20% of the country’s nearly $4 trillion economy.

Economic and social impact

The codes formalise measures that were approved by parliament in 2020 but were delayed for several years due to political resistance. Economists warn that small and informal firms may face short-term strain as they adapt, but some expect the reforms to strengthen household incomes over time through clearer minimum-wage rules and broader social security coverage.

“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.

Reactions

Trade unions remain strongly opposed. Amarjeet Kaur of the All India Trade Union Congress criticized the move, saying it was implemented despite union opposition and warned that it could undermine workers’ rights, including protections tied to fixed-term employment and earlier statutes.

Supporters argue the reforms bring clarity and nationwide portability of benefits, particularly for women, youth, migrant, gig and informal workers. Government forecasts indicate the gig economy could expand from roughly 10 million workers in 2024/25 to more than 23.5 million by 2030, underscoring the potential scale of impact.

Outlook

Implementation will be watched closely by businesses, labour groups and policymakers. The immediate period is likely to involve legal and administrative adjustments as employers and regulators put the new codes into practice. Over the medium term, the effects on job creation, wages and workplace conditions will depend on enforcement, complementary policies and how firms respond to the increased flexibility.