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India’s labour and employment ecosystem underwent a decisive shift in 2025, shaped by long-pending regulatory reform, improving labour market indicators and the steady expansion of social protection and digital welfare systems, according to the Ministry of Labour and Employment.
The year was marked by the rollout of new labour laws alongside falling unemployment and sustained efforts to broaden employment opportunities across sectors, particularly in rural areas and among women, the ministry said.
Labour codes come into force
A key milestone was the government’s decision to bring four Labour Codes into effect from November 21, 2025 — 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, as per an official statement. Together, the codes subsume 29 existing labour laws, aimed at simplifying compliance and updating India’s labour framework.
The codes introduce uniform definitions across statutes, web-based inspection systems and a shift towards facilitation through Inspector-cum-Facilitators, the statement said. Compliance has been streamlined through single registration, licensing and return mechanisms, while provisions for compounding and decriminalisation of first-time offences have been included.
The framework also mandates non-discrimination, including against transgender persons, and expands opportunities for women, permitting employment across sectors and night shifts with prescribed safety measures, according to the ministry.
Unemployment eases as participation improves
Alongside regulatory reform, employment indicators showed notable improvement. Data from the Periodic Labour Force Survey pointed to a sustained decline in unemployment, official data showed.
In November 2025, the unemployment rate for persons aged 15 and above fell to 4.8%, from 5.4% in October, marking its lowest level since April, as per PLFS data cited by the government. Rural unemployment declined to 3.9%, while urban unemployment eased to 6.5%, with a sharper fall recorded among women in both segments.
Other labour market indicators also strengthened. The Labour Force Participation Rate rose to a seven-month high of 55.8% in November, while the Worker Population Ratio improved to 53.2%, reflecting higher workforce engagement and employment absorption, the data showed. These gains were supported by improvements in rural employment, rising female participation and a gradual recovery in urban labour demand, according to the ministry.
Wider safety net and digital push
Social protection coverage expanded further during the year, with India rising to second place globally and coverage increasing to 64.3% of the population, the government said.
The Employees’ Provident Fund Organisation undertook a major digital overhaul, including auto-settlement of claims up to ₹5 lakh, a centralised pension system and face authentication-enabled Universal Account Number activation, according to the ministry. The Employees’ State Insurance Corporation expanded its footprint to 713 districts, with hospital bed capacity rising to 87,715 in FY2024–25, official figures showed.
Employment facilitation also gathered pace. The National Career Service portal hosted 9,785 job fairs in 2025, leading to 1.58 lakh selections, while the e-Shram portal crossed 31.42 crore worker registrations, the statement said. A dedicated module for platform workers was also launched, onboarding 14 aggregators.
Together, these developments positioned 2025 as a year of consolidation and transition for India’s labour market, combining legislative reform, improving employment trends and a wider welfare net within an increasingly digitised system, according to the Ministry of Labour and Employment.
The year was marked by the rollout of new labour laws alongside falling unemployment and sustained efforts to broaden employment opportunities across sectors, particularly in rural areas and among women, the ministry said.
Labour codes come into force
A key milestone was the government’s decision to bring four Labour Codes into effect from November 21, 2025 — 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, as per an official statement. Together, the codes subsume 29 existing labour laws, aimed at simplifying compliance and updating India’s labour framework.
The codes introduce uniform definitions across statutes, web-based inspection systems and a shift towards facilitation through Inspector-cum-Facilitators, the statement said. Compliance has been streamlined through single registration, licensing and return mechanisms, while provisions for compounding and decriminalisation of first-time offences have been included.
The framework also mandates non-discrimination, including against transgender persons, and expands opportunities for women, permitting employment across sectors and night shifts with prescribed safety measures, according to the ministry.
Unemployment eases as participation improves
Alongside regulatory reform, employment indicators showed notable improvement. Data from the Periodic Labour Force Survey pointed to a sustained decline in unemployment, official data showed.
In November 2025, the unemployment rate for persons aged 15 and above fell to 4.8%, from 5.4% in October, marking its lowest level since April, as per PLFS data cited by the government. Rural unemployment declined to 3.9%, while urban unemployment eased to 6.5%, with a sharper fall recorded among women in both segments.
Other labour market indicators also strengthened. The Labour Force Participation Rate rose to a seven-month high of 55.8% in November, while the Worker Population Ratio improved to 53.2%, reflecting higher workforce engagement and employment absorption, the data showed. These gains were supported by improvements in rural employment, rising female participation and a gradual recovery in urban labour demand, according to the ministry.
Wider safety net and digital push
Social protection coverage expanded further during the year, with India rising to second place globally and coverage increasing to 64.3% of the population, the government said.
The Employees’ Provident Fund Organisation undertook a major digital overhaul, including auto-settlement of claims up to ₹5 lakh, a centralised pension system and face authentication-enabled Universal Account Number activation, according to the ministry. The Employees’ State Insurance Corporation expanded its footprint to 713 districts, with hospital bed capacity rising to 87,715 in FY2024–25, official figures showed.
Employment facilitation also gathered pace. The National Career Service portal hosted 9,785 job fairs in 2025, leading to 1.58 lakh selections, while the e-Shram portal crossed 31.42 crore worker registrations, the statement said. A dedicated module for platform workers was also launched, onboarding 14 aggregators.
Together, these developments positioned 2025 as a year of consolidation and transition for India’s labour market, combining legislative reform, improving employment trends and a wider welfare net within an increasingly digitised system, according to the Ministry of Labour and Employment.
