Labor Laws, Costs, and Hiring Practices in India -Preview

2 Introduction ROHIT KAPUR Managing Director India Office Dezan Shira & Associates India has theworld’s second largest working age population at over 500million, representing 18 percent of the total population. The country’s millennial populace – defined as the population aged between 18 and 35 years – is larger than the US and China’s today, respectively. New entrants and investors should, however, mind that various regressive factors influence the distribution of labor in the Indian economy, including gender and other identity-based discrimination. Moreover, only a small segment of the labor market is highly skilled. Here, foreign firms can become industry leaders by setting best standards, such as fair recruitment practices, while being compliant with the law and improving efficiencies. In addition, firms operating in India confront its complex structure of labor laws, which can make compliance difficult. While it is advisable to seek professional support, firms should pay attention to the existence of multiple federal labor laws as well as federally and locally enacted laws that are specific to the state and industry of location and the size of the firm. In this magazine, we discuss the structure of India’s labor laws, the composition of its labor market, and average hiring costs, with special reference to the country’s manufacturing and IT sectors. Finally, we put a spotlight on India’s female labor force participation rate, which is among the lowest in Asia, and explain how firms will benefit through diversity hiring strategies. With kind regards, Rohit Kapur Credits Publisher / Adam Livermore Editors / Melissa Cyrill, Rohini Singh, Oliver Gonsalves, and Adam Pitman Design / Imelda González Reference India Briefing and related titles are produced by Asia Briefing Ltd., a wholly owned subsidiary of Dezan Shira Group. Content is provided by Dezan Shira & Associates. No liability may be accepted for any of the contents of this publication. Readers are strongly advised to seek professional advice when actively looking to implement suggestions made within this publication. For queries regarding the content of this magazine, please contact: editor@asiabriefing.com All materials and contents © 2018 Asia Briefing Ltd. Asia Briefing Ltd. Unit 507, 5/F, Chinachem Golden Plaza, 77 Mody Road, Tsim Sha Tsui East Kowloon, Hong Kong. www.asiabriefing.com www.dezshira.com www.aseanbriefing.com www.india-briefing.com www.indonesiabriefing.com www.vietnam-briefing.com www.china-briefing.com

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