The Daily Brief India has a new labour law regime
Nov 26, 2025
India is transforming its labor laws by consolidating 29 regulations into four new codes, aiming for better compliance and growth. The changes limit inspector powers and equalize wage definitions, impacting take-home pay and striking power of unions. Meanwhile, the sustainability of the AI boom is questioned, with potential risks like GPU depreciation and a mismatch in financing. Concerns over interdependent investments in the AI ecosystem highlight the fragility of its growth, raising the stakes for future policy interventions.
AI Snips
Chapters
Transcript
Episode notes
Major Compliance Overhaul Reduces Inspector Raj
- India's new labour codes collapse 29 laws into four, cutting 1,000+ provisions and huge compliance burdens for businesses.
- Inspector powers are curtailed and many offences are decriminalized, reducing arbitrary raids and harassment.
Higher Thresholds To End Industrial Dwarfism
- Raising the layoff threshold from 100 to 300 workers aims to let firms grow without hitting sudden regulatory cliffs.
- Past state experiments, like Rajasthan, saw faster growth when thresholds were raised, suggesting potential national gains.
Wage Standardization Narrows Loopholes
- The Code on Wages standardizes definitions and sets at least 50% of CTC as basic pay to close allowance loopholes.
- Employees will save more for retirement while firms face higher gratuity and payroll restructuring work.