The Indian government has been doing quite a bit to shore up the share of manufacturing in GDP. From PLI schemes to labour law reforms, there is a clear push to manufacture more in India for India, as well as for the world. However, these efforts are running into an unexpected wall – the unwillingness of India’s youth – the youngest large workforce on earth – to move from farm to factory. This piece in Mint sheds light on this problem.
“Every weekday morning at 6.30 am in India’s factory clusters—Manesar, Noida, Dholera, Hosur, and many more—a unique scene emerges. Factory supervisors start scouting for workers. They reach out to the local labour contractors to round up as many workers as possible, depending on that day’s shortage on the factory floors.”
Take Greenway Grameen Infra, a small cookstove maker in Vadodara that needed 40 extra hands in a demand spurt. Its co-founder Ankit Mathur: “We tried the local network to get more people. We put out ads, reached out to local contractors, who promised but didn’t show up. They stopped taking calls. Eventually, over two weeks, we got half of what we needed, and we let go of some demand. It was not optimal.”
In Bengaluru, A. Dhananjay of Maruthi Garments has 20 sewing machines lying idle; a decade ago there were queues at his gate. “No one wants to work in factories anymore. They want to work on bikes and go around town,” he fumes — a nod to the quick-commerce delivery jobs where, the writer notes, “Compared to the rigidity and discipline needed on the manufacturing floor, delivery roles offer more flexibility” and workers get “faster earnings, more autonomy, and daily payouts, even when the overall cost to company is lower.”
Yet this is not a story of too few workers. Over two decades factories have nearly doubled and employment has grown faster still: “India has more than 200,000 operational factories that employed 18.5 million people as of 2023. In 2001, over 124,000 factories employed eight million.” The production-linked incentive schemes, now spanning 14 sectors, have raised the bar again. Randstad estimates the sector needs “an incremental inflow of 10 to 12 million skilled workers over the next five years,” amounting to “a 40% to 45% talent shortfall in specialized, high-growth technical roles.” Legacy sectors face the opposite squeeze: “legacy, labour-intensive sectors such as textiles and apparel, which sustain roughly 15-16% of the formal manufacturing workforce, are facing volume-driven worker deficits caused by high seasonal attrition and a clear demographic pivot.”
At the heart of it is an expectation gap running the length of the labour pyramid. At the top, aspirations have outgrown the shop floor: “India’s gross enrolment ratio … has risen to 30% in 2023-24 from 23.7% in 2014-15 … creating a larger pool of educated and ambitious young workers who increasingly prefer salaried, office-based jobs over factory employment.” Azim Premji University’s State of Working report adds that “younger migrants are systematically more educated than older migrants, and they travel much less as opposed to their less-educated counterparts.” Parth Kanani of Aimtron Electronics is blunt: “Which 25-year-old wants to join a manufacturing unit? Everyone wants software, artificial intelligence, services. Either we try to find an alternate solution to the shortage, or we try to bring in automation and achieve the same consistency.”
At the bottom of the pyramid, the problem is simpler — the money. Raj Prajapati, 20, lasted eight months at a Kolhapur towel-and-denim factory before heading back to Mirzapur: “They were paying me ₹15,000 a month. I was working 12 hours, six days a week. After paying for terrible food and accommodation, I was barely left with ₹8,000-9,000. I can make that money by making and selling clay diyas in my village. I told them to pay me more, but they didn’t agree, so I left the factory.”
The data bears him out. Ashoka University finds that “daily wages of industrial workers stood at ₹307 per hour in 2021-22 compared to ₹285 per hour a decade ago, showing barely any growth in wages adjusted for inflation.” Randstad’s Yeshab Giri is blunter still: “close to about half of the frontline workers in a manufacturing set-up earn about ₹10,000 a month.”
Automation, meanwhile, is splitting the floor in two, says Manmeet Singh of the Indian Staffing Federation: “They cannot operate on legacy low-skill manual labour—the 10th or 12th pass. Factories are poaching higher-skilled talent at 15-20% higher salaries, but baseline entry workers in manual assembly jobs are getting the nominal 6-8% growth.”
India’s cheap labour — $3.45 an hour in 2025 against $5.83 in mainland China — ought to be its trump card. But cheap is not the same as productive, and Equirus reckons the productivity gap with China has widened by over $30,000 per worker since 2000. S&P Global’s Prateek Chaturvedi draws out the trap: “Low productivity limits firms’ ability to offer sustained wage increases, while a high unemployment rate reduces workers’ bargaining power. For many rural households, moving to a city no longer guarantees significantly higher incomes or greater job security.”
Nor do workers move much: “only 12% of migrant workers move across state borders in India.” Nitin Dave of Quess Corp: “India has the demographic dividend, and yet an adequate number of people are not available at the right time, right place.” The pull of home is strong: “The migration experience is hard… A lot of entry-level workers ask why they should migrate when they can make the same money at home. But wages do go up after one-two years of working in factories.”
And so many stay on the land — agriculture’s share of the workforce was 42% in 2025, up from 41% in 2019. Chaturvedi calls this the clearest warning sign: “In a successful structural transformation, workers move from farms into higher-productivity manufacturing and modern services. Instead, many workers appear to be remaining in or returning to agriculture, construction and informal services… Historically, workers left agriculture for manufacturing because factory jobs offered a clear productivity and wage premium. Today, however, manufacturing growth has moderated.”
The corporate answer, increasingly, is to stop asking. BL Agro’s Ajay Bhatt on what automation did for hiring: “Labour cannot achieve the kind of productivity expected now. Labour turnover for unskilled jobs is also very high. We were in a continuous process of hiring. That headache has come down to a large extent.” Giri offers the more hopeful route — paying for skill, not mere presence: “When workers see a clear, policy-backed financial incentive tied to acquiring advanced certifications, it drives organic up-skilling,” alongside “targeted corporate tax credits for MSMEs… under the National Apprenticeship Promotion Scheme.”
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