Labour unrest exposes deeper economic fault lines

The recent flare-ups in the industrial belts of Noida and Manesar have brought to surface underlying pressures from low wages, informal employment and rising costs

New Delhi: Workers’ protests recently disrupted industrial activity and civil life in Noida, a key business hub in the Delhi-National Capital Region. In some areas, the protests turned violent, with incidents of arson, vandalism and clashes with police. The Uttar Pradesh government announced up to a 21 per cent hike in minimum wages to calm the unrest, but also detained hundreds of protesters and alleged a Pakistan-linked conspiracy. 

Most of the protesters are contractual workers, with little or no union representation. So how did such a large-scale protest erupt? While Uttar Pradesh Labour Minister Anil Rajbhar has called it a “well-planned conspiracy” by anti-national forces having possible links with Pakistan, the incident highlights broader vulnerabilities faced by workers across industrial clusters. 

All India Trade Union Congress (AITUC) General Secretary Amarjeet Kaur said the protests were not sudden, adding that workers’ anger had been building for several months. 

“In early February, these protests began in Barauni, Bihar. Thousands of workers were on the road demanding revision of minimum wages, proper payment for overtime work and social security,” she said, adding that similar protests also took place in Panipat, Faridabad and Manesar in Haryana, and Surat in Gujarat. 

Kaur said the main demands across the protests were similar — higher wages, fair overtime pay, proper working conditions and social security such as provident fund and gratuity. 

“Naturally, workers in Barauni have friends and family in places like Panipat, Manesar and Noida. Information spread through these networks and social media,” she said, dismissing the conspiracy theory behind the protests. 

However, Noida Police claimed that inflammatory messages were circulated through WhatsApp groups and social media to intensify the protests. Aditya Anand, a BTech graduate from the National Institute of Technology (NIT) Jamshedpur, has been described by investigators as a key conspirator and has been arrested.

According to Sudip Dutta, National President of the Centre of Indian Trade Unions, workers’ key demands include an eight-hour workday, double overtime pay, proper lunch breaks and eating spaces, higher wages and social security benefits.

“My monthly salary is Rs 12,000. Prices are rising for everything, but there is hardly any increase in wages,” said a worker who took part in the Noida protests. 

Another worker, who requested anonymity, said labourers are struggling due to rising living costs. “Now we pay Rs 3,000 to Rs 4,000 for an LPG cylinder in the black market. Earlier it was around Rs 1,000. How can we survive without a salary increase?” the worker asked.

Real wages for regular jobs have not kept pace with price rises. Inflation measured by the Consumer Price Index for Industrial Workers (CPI-IW) increased by about 54 per cent between October 2016 and February 2026, while minimum wages rose by around 53 per cent. This indicates that the real wages of workers are now less than what they were getting 10 years ago. 

There is also a wide disparity. In 2016, monthly minimum wages for unskilled workers were Rs 9,724 in Delhi, Rs 8,070 in Haryana and Rs 7,936 in Uttar Pradesh. By 2026 (before recent protest-linked hikes), they stood at Rs 18,456 in Delhi, Rs 11,274 in Haryana and Rs 11,314 in Uttar Pradesh.

Living costs are largely comparable across the National Capital Region (NCR), but minimum wages vary widely. With about a 90 per cent rise since 2016, Delhi has the highest minimum wages in the NCR, while Noida and Ghaziabad have the lowest.

Protests in Manesar, Palwal, Faridabad and other parts of Haryana prompted the Nayab Singh Saini government to hike minimum wages by up to 35 per cent. Effective April 1, 2026, wages for unskilled workers rose from Rs 11,274 to Rs 15,220; for semi-skilled from Rs 12,430 to Rs 16,780; skilled from Rs 13,704 to Rs 18,500; and highly skilled from Rs 14,389 to Rs 19,425.

Trigger for Noida protests

Haryana’s wage hike acted as an immediate trigger for the Noida protests, with wide disparities reported in wages across NCR subsidiaries of the same companies. The Yogi Adityanath government also agreed to hike the minimum wages by up to 21 per cent in response to the protests. 

In Ghaziabad and Gautam Buddha Nagar (Noida) districts, which are adjacent to Delhi and form part of the NCR, minimum wages for unskilled workers have been raised from Rs 11,313 to Rs 13,690 per month. For semi-skilled workers, they have been increased to Rs 15,059 and for skilled workers to Rs 16,868. 

The wage hike has been coupled with a crackdown on protesters and labour contractors. Licences of over 35 labour contractors have been cancelled for alleged violations of workers’ rights, including non-payment of wages, bonuses and overtime.

Hundreds of protesters have been booked under various sections, including rioting, criminal conspiracy, attempt to murder and endangering life or personal safety.

West Asia conflict

The US–Israel–Iran conflict has significantly impacted Indian industries and workers. Factories across the country have cut operations due to shortages of raw materials and rising energy prices, leading to job losses.    

High LPG prices have pushed up the cost of living. Outside food has also become more expensive. “A cup of tea used to cost Rs 15, now it is Rs 20. A plate of samosas now costs Rs 50,” said Mahendra, a factory worker in Noida, referring to the impact of the West Asia conflict on their living costs. 

A large number of migrant workers have returned to their native places, leading to labour shortages in industrial clusters across Delhi NCR, Punjab, Gujarat, Tamil Nadu and Maharashtra. 

Deepak Dumra, Director of Eveline International, a Ludhiana-based hosiery knitwear manufacturer and exporter, said at least 20 per cent of workers who went to their native places during the Holi festival in late February and early March have not returned to work.

Another Ludhiana-based businessman said the fear among workers is similar to that during the Covid-19 pandemic. “In a crisis situation, people prefer to stay close to their families. The difficulties faced during Covid are still fresh in their minds,” said the industrialist, requesting anonymity.

According to the United Nations Development Programme (UNDP), the ongoing West Asia conflict could push around 25 lakh people in India into poverty.

“Through higher fuel, freight and input costs, the shock is diminishing household purchasing power, increasing food insecurity, straining public budgets and weakening livelihoods,” the UNDP said in a report titled Military Escalation in the Middle East: Human Development Impacts Across Asia and the Pacific.

Minimum wages

Recent labour protests have focused on demands for higher minimum wages, yet data shows that a vast majority of workers in the country still earn below the statutory threshold.

According to an analysis of the Periodic Labour Force Survey (PLFS) data for 2023–24, nearly 64 per cent of Indian workers earn less than the minimum wage. 

A note by the Foundation for Economic Development states that for around 50 per cent of workers, even a 30 per cent wage increase would still leave their earnings below the minimum wage threshold.

The New Delhi-based think tank said that India’s current minimum wage laws may be doing more harm than good for low-income workers. “This is also one of the contributing factors to slow formal-sector job growth in the country, leaving nearly 90 per cent of India’s workforce — millions of individuals — stuck in informal, low-paying jobs that lack contracts or social security benefits,” it said.

“If nearly half of our workforce cannot be legally hired even after giving them a 30 per cent raise, then the minimum wage has backfired,” said Rahul Ahluwalia, founding director of Foundation for Economic Development.

Labour codes

Four labour codes namely, 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, which came into effect from November 21 last year, have been touted as major labour reforms. These codes have rationalised 29 central labour laws into a unified framework covering wages, industrial relations, social security and safety.

Under the earlier regulations, minimum wages applied only to scheduled employment, covering only about 30 per cent of workers. The newer framework has expanded this scope: the Code on Wages, 2019 establishes a statutory right to minimum wages for all employees across both the organised and unorganised sectors.

The new code also has provisions for a statutory floor wage, to be set by the central government based on minimum living standards, with scope for regional variation. No state can fix minimum wages below this level. Labour unions argue that the new codes empower industries and make workers vulnerable.

Insights

“These labour codes are actually to legalise all the violations that are happening,” said Amarjeet Kaur.

Under the new laws, a large number of business-related offences have been decriminalised to improve the ease of doing business. The labour codes have replaced imprisonment with monetary fines for certain violations, and employers are given a mandatory 30-day window to comply before legal action is initiated. Additionally, over 1,000 minor offences across 79 Acts have been decriminalised through the Jan Vishwas (Amendment of Provisions) Bill, 2026, which was passed by the Parliament earlier this month. 

Manufacturing ambition

Just months after taking office in 2014, Prime Minister Narendra Modi’s government launched the “Make in India” initiative with the aim of transforming the country into a global manufacturing hub. 

Over the past decade, the Modi government has taken a series of steps to improve India’s Ease of Doing Business ranking. Labour reform has been positioned as a key element of efforts to make doing business easier in the country.

However, manufacturing has not yet taken off. The share of manufacturing in India’s GDP has remained largely stagnant at around 16–17 per cent. Only about 12 per cent of India’s workforce is employed in manufacturing, compared with nearly 30 per cent in China.

The challenge is not only to ensure better pay and working conditions for workers in industrial clusters, but also to create jobs for millions of youth entering the workforce each year. When a manufacturing company creates one new job, it indirectly generates about 2.2 additional jobs in the economy, while in the case of services, it creates less than one additional job.

Manufacturing creates productive jobs for the average worker. It also enables other sectors to grow by generating demand for their output and through technology spillovers.

Industry leaders fear that a sharp rise in wages could erode the competitiveness of Indian manufacturers.

“Our margins are very thin. If we increase prices, our customers will shift to countries like Bangladesh and Vietnam,” said a Noida-based industrialist involved in the manufacturing and export of apparel products.

In sectors such as textiles, gems and jewellery, and engineering goods, India’s competitiveness is largely based on low costs, primarily driven by cheap labour. High-technology goods account for less than 6 per cent of India’s overall engineering export basket.

The government has set a target of boosting merchandise exports to $1 trillion by 2030. In 2025–26, India’s goods exports stood at $441.8 billion, just 0.9 per cent higher than the previous year, according to data from the Ministry of Commerce and Industry. 

India faces a critical challenge in balancing its manufacturing ambitions with labour interests. Recent worker protests have further added to the complexity.