India & Labour Relations
A billion workers, a fragmented movement, and the challenge of organizing informality
India’s labour relations present a paradox: a country with a rich and militant union tradition, detailed labour legislation, and major union confederations — where the vast majority of the workforce has never been covered by a collective agreement. With over 90% of Indian workers employed in the informal economy, the gap between formal labour law and the reality of most Indian workers’ lives is the defining challenge of Indian industrial relations.
10 Things That Stand Out About Labour Relations in India
- India’s labour movement emerged in the context of the independence struggle, with early unions closely allied with the Indian National Congress and nationalist politics. The All India Trade Union Congress (AITUC), founded in 1920 and chaired in its early years by Bal Gangadhar Tilak and later by Jawaharlal Nehru, was the first national union confederation.
- The Industrial Disputes Act of 1947, passed in the year of independence, remains the foundational statute for collective labour relations in India. It established conciliation, arbitration, and adjudication mechanisms for resolving industrial disputes and imposed significant restrictions on layoffs and closures in larger establishments.
- One of the most significant figures in Indian labour history is Narayan Malhar Joshi, who founded the All India Trade Union Congress in 1920 and dedicated his life to building independent, non-communist unionism in India. His advocacy helped establish the legal framework of industrial relations that India inherited at independence.
- India’s union movement is deeply fragmented along political party lines. The major central trade union organizations — INTUC (Congress-affiliated), AITUC (Communist Party of India), CITU (Communist Party of India Marxist), BMS (BJP-affiliated), and HMS — compete fiercely, making coordinated national action difficult despite periodic joint campaigns.
- The informal sector employs over 90% of India’s workforce — domestic workers, agricultural labourers, construction workers, street vendors, and small enterprise employees — who are largely outside the reach of formal labour law and collective bargaining. Organizing this sector is the central challenge facing Indian unions.
- The SEWA (Self Employed Women’s Association), founded by Ela Bhatt in Ahmedabad in 1972, is one of the most innovative labour organizations in the world. It organizes self-employed women workers in the informal economy — garment workers, vendors, domestic workers — and has developed a model of cooperative-union hybrid organization that has influenced labour organizing globally.
- India’s Special Economic Zones (SEZs) and export processing zones have often operated with restricted union rights and limited labour law enforcement, creating enclaves of export production where the protections of the formal labour law framework do not fully apply.
- The Code on Industrial Relations, 2020 — one of four labour codes that consolidated India’s 44 central labour laws — made significant changes to the framework for collective bargaining, strikes, and dispute resolution, including raising the threshold for mandatory prior notice before strikes and easing retrenchment norms. The codes have been strongly opposed by major union confederations.
- India has a long tradition of general strikes (bandhs), with periodic national stoppages called by coalitions of central trade unions to protest economic policies. The 2020 general strike, called in opposition to the labour code reforms, claimed participation of over 200 million workers — one of the largest single-day strikes in history.
- Contract labour is pervasive in Indian industry, with permanent jobs increasingly replaced by contract arrangements that reduce employer obligations under the formal labour law framework. The Contract Labour (Regulation and Abolition) Act of 1970 attempts to regulate this practice, but enforcement has been inconsistent, and the growth of contract labour is widely seen as a mechanism for circumventing collective bargaining.
