Modi Government Strikes Hard on Indian Workers

India’s opposition parties have long described Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) as “pro-corporate.” Such charges have intensified since November 21 last year, when the new labor codes came into effect.

The Modi government described the new labor codes as the “biggest labor reforms in independent India,” which modernize regulations, enhance worker welfare, and ease business operations. The labor reforms expand social security to previously excluded workers, such as gig workers, and mandate gender-neutral pay, the government says. It also says that the new labor codes have made the issuing of appointment letters to employees mandatory, standardized minimum wages, and mandated health check-ups for those over 40 years of age. Reforms that reduce burdens on employers will help draw new investments and create jobs, the government has claimed. “It greatly empowers our workers. It also significantly simplifies compliance and promotes ‘Ease of Doing Business’,” Modi wrote on the social media platform, X.

However, India’s 10 central trade unions and major opposition parties are opposing the codes, calling them “anti-worker” and “pro-employer.” Major trade unions observed a national strike on February 12.

“Through these laws, Modi’s pro-capitalist and anti-worker mindset has again come to the fore. The country does not accept these laws,” said Priyanka Gandhi Vadra, a parliamentarian of the Congress, India’s main opposition party.

The controversy stems from the Modi government’s consolidation of 29 existing central labor laws into four codes: the Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Occupational Safety, Health and Working Conditions Code (2020). The Industrial Relations Code (Amendment) Bill, 2026, was passed in Parliament in February to bring further clarity.

Demanding the repeal of the labor codes, Communist Party of India (Marxist-Leninist)(Liberation) lawmaker Sudama Prasad told Parliament during a recent debate that the labor codes are “meant to push the workers into slavery. These laws are for encouraging the exploitation and torture of workers.”

Trade unions allege that layoffs have been made easier by tripling the retrenchment threshold. Earlier, permission from the government was required to sack 100 or more employees. Now, no permission is required to sack up to 300 employees. This is the same for closure of business establishments.

Earlier, establishments without electricity and having 20 employees, and those with electricity and employing 40 people, came under the ambit of the Factories Act. Now, establishments without power need to have 40 employees, and those with power need to have 80 employees, to be recognized as a factory, reducing compliance burdens for smaller units. The minimum number of contractual workers required to trigger the law’s full regulatory requirements has been raised from 20 to 50 workers.

Under the previous Industrial Disputes Act, 1947, a 14-day advance notice for strikes was required only in public utility services, like water, electricity, and transport. The new codes expand this to all industrial establishments, mandating workers to provide at least 14 days’ notice before going on strike.

Trade unions allege it is an assault on workers’ hard-earned right to strike. This would allow the establishment to prepare countermeasures, such as hiring replacements, and transferring and sacking workers. Trade unions allege it takes away the power of sudden action, a crucial component of their rights to protest injustice.

Besides, as Congress President Mallikarjun Kharge argued, the provision that a union that has 51 percent of total employees as its members will be the sole negotiator in talks with the management sidelines smaller unions and reduces representation for diverse worker groups.

According to the Communist Party of India (Marxist), India’s largest leftist party, the labor codes are “perhaps the most profound restructuring of laws that mediate class relations in India.” The party said the change “decisively shifts the weight of law away from the working class” and strengthens the power of the industrialists and employers. The changes give employers “a free hand to hire and fire, give arbitrary wages, increase working hours while providing even less for social security and welfare than now,” the party alleged.

The new Codes also make it difficult to form and maintain trade unions, restrict the right to strike, and impose heavy punishments for “illegal” strikes even as they reduce penalties for violations of workers’ rights by employers, the party said. The CPI concluded by calling the changes “a blow to Constitutional provisions of right to livelihood and a life of dignity, and also right to association and collective bargaining.”

The government claims it is aimed at building harmony and ease of doing business. Arguing that the notice period is intended to prevent sudden disruptions, LIC India, one of India’s largest government-run companies, argued, “This framework supports conciliation, reduces loss of man-days, and strengthens a harmonious relationship between workers and management.” Of course, LIC India was speaking for private-sector companies, because no rule has changed for public-sector utilities. It is only that private companies will now enjoy the same benefits that public sector units used to receive in managing essential public services.

In many BJP-ruled states, where such reforms were already taking place, the new laws do not make much difference. However, full implementation at the national scale depends on all states issuing their own rules and notifications in line with the central codes, as labor is a “concurrent subject” shared between the federal government and the states.

While states ruled by the BJP or its allies have already notified their rules or are in the process of doing so, at least three opposition-ruled states have indicated they would not implement the central codes in their entirety. These states – West Bengal, Tamil Nadu and Kerala – are likely to frame their own rules amending some of the provisions of the central codes that trade unions strongly oppose. Of them, West Bengal and Tamil Nadu are large states, accounting for the third- and fourth-highest number of India’s parliamentary seats.

“The Industrial Relations Code has taken away the entire livelihood of the laborers of the country,” Kalyan Banerjee, a senior parliamentarian of the Trinamool Congress, the ruling party of the eastern Indian state of West Bengal, said in the parliament.

These three states are poll-bound – elections are expected to be held by May – and are unlikely to implement the central codes, especially the controversial provisions, as that would earn them the wrath of the trade unions, which might impact their electoral prospects.

However, the lack of consensus among opposition parties has also become clear, triggering conflict within India’s opposition camp.

The Congress-led government in Karnataka is likely opting for a middle path, which has irked the leftist trade unions. These trade unions are also asking the Congress-led Telangana government to clarify its stand on the codes. With the Congress party being a key contender for power in left-ruled Kerala, it remains to be seen how the two Congress-ruled states in southern India navigate this issue amidst intensifying electoral campaigns.