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IZA Policy Paper No. 218
December 2025
Impact of India's New Labour Codes on Workers

India introduced sweeping legal changes on labour laws in late 2025, summarising 29 laws into 4 labour Codes. The Key Changes and Concerns Industrial Relations Raises the threshold for requiring government permission for layoffs/retrenchments from 100 to 300 workers, encouraging firms to avoid permanent employees; Introduces "sole negotiating union" requiring 51% worker support; Imposes 14-day notices and prohibitions during conciliation, making legal strikes impossible Wages: Introduces unclear "floor wage" concept without adequate distinction from minimum wage; Lacks mechanism for revising the basic wage component based on changing consumption patterns; Social Security: Maintains 10-worker threshold for provident funds and benefits, excluding most unorganized sector workers; Misses opportunity to universalize social security as a legislative right Occupational Safety: Covers only establishments with 10+ workers, excluding smaller workplaces; The codes represent missed opportunities for genuine labor reform, avoiding issues like job security, collective bargaining rights, fair minimum wages, gender discrimination, and social security - especially for majority of India's workforce in the informal sector.

Communications
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Network Coordination
Christina Gathmann
christina.gathmann@liser.lu

The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

About IZA@LISER Network
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