India’s labour market has been shaped by a complex legacy of well-intentioned but ultimately restrictive regulations. For decades, labour laws designed to protect workers ended up discouraging firms from growing, formalising, or hiring at scale. The sweeping labour reforms implemented through the four labour codes mark an important break from this past. By modernising outdated legislation and simplifying compliance, these reforms promise to reshape the labour landscape and unlock India’s employment and growth potential. From here on, the states that enforce these reforms with full commitment are likely to witness major investments and job creation.

The foundation of India’s labour regulation was the Industrial Disputes Act (IDA) of 1947. This created powerful disincentives for firms to ex

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