US embassy cable - 05NEWDELHI5402

UNCLAS SECTION 01 OF 16 NEW DELHI 005402 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB, PHUM, ECON, ETRD, PGOV, IN, Labor 
SUBJECT: FOREIGN LABOR TRENDS REPORT: INDIA, 2004 
 
The following is the text of the National Foreign Labor 
Trends Report for India, 2004, prepared as requested by DOL. 
 
I. SUMMARY OF MAJOR DEVELOPMENTS 
 
A.Government 
 
The Government is a federal republic made up of three 
branches at the federal level: (1) the Executive Branch, 
consisting of the President (Chief of State), the Prime 
Minister (Head of Government), and the Council of Ministers 
(Cabinet); (2) the Legislative Branch, which has a bicameral 
Parliament, consisting of a lower house (Lok Sabha) with 545 
members and an upper house (Rajya Sabha) with no more than 
250 members; and (3) the Judicial Branch, which is 
independent.  At the state level, each of India,s 28 states 
and 7 union territories has its own state assembly, council 
of ministers, and court system. 
 
During 2004, India held national parliamentary elections that 
resulted in a change of government.  The National Democratic 
Alliance (NDA) coalition government led by the Bharatiya 
Janata Party (BJP) under Prime Minister Atal Bihari held 
power at the beginning of the year, but lost in the April-May 
elections.  A United Progressive Alliance (UPA) government 
led by the Congress party under Prime Minister Manmohan Singh 
took office in May.  The BJP is now the main opposition 
party, with 138 seats.  A broad range of regional and 
communist parties does not belong formally to the UPA but 
supports the UPA government from the outside.  The UPA 
depends on the cooperation of these outside parties to 
maintain its control of Parliament, a situation that has 
sometimes produced tension between Congress and its allies, 
particularly over economic and labor policies. 
 
B.Economy 
 
India's economy encompasses traditional village farming, 
modern agriculture, handicrafts, a wide range of modern 
industries, and a multitude of support services.  The 
agricultural sector employs the largest percentage of the 
workforce (approx. 60 percent), although it represents only 
22.7 percent of GDP.  Major crops include wheat, rice, coarse 
grains, oilseeds, cotton, jute, and tea.  The industrial 
sector employs 17 percent of the workforce and represents 
26.7 percent of GDP.  Major industrial products include 
textiles, processed food, steel, machinery, transportation 
equipment, cement, aluminum, fertilizers, mining, petroleum, 
chemicals, and computer software.  The services industry 
employs 23 percent of the workforce and represents 50.7 
percent of GDP.  India is capitalizing on its large numbers 
of well-educated people skilled in the English language to 
become a major exporter of software services and software 
workers. 
 
During 2004, the growth rate was 6.6 percent, with an 
inflation rate of 6 to 7 percent.  The impressive growth rate 
is largely attributable to increased agricultural production, 
robust merchandise exports, a booming stock market, and the 
steady pace of reforms.  The Government would like to 
increase the growth rate, but most economists believe it will 
not be possible without further structural reforms. Wages and 
benefits kept pace with inflation.  The local currency 
(rupee) appreciated slightly against the dollar in 2004.  The 
U.S. accrued a trade deficit of nearly 9.5 billion dollars 
with India during 2004, an increase from 8.1 billion dollars 
in 2003.  Exports of goods to the U.S. were approximately 6.1 
billion dollars. 
 
India continued its transition from a government-controlled 
economy to a largely market-oriented system. The private 
sector was predominant in agriculture, most non-financial 
services, consumer goods manufacturing, and some heavy 
industrial sectors. A 1.7 percent annual population growth 
rate and a population that surpassed 1.06 billion contributed 
to the country's economic challenges, but also constitute a 
rich base of human capital. 
C.Workforce 
According to the 2001 census figures, there are approximately 
403 million workers in the Indian economy, of which 311 
million (77 percent) are in rural settings and 92 million (23 
percent) are in urban settings. The bulk of the Indian 
workforce (approximately 60 percent) is in the agricultural 
sector.  Projections put the labor force for the year 2004 at 
approximately 482 million workers. 
 
Seven percent of the work force is in the formal, organized 
sector.  Growth in this sector remained sluggish.  Employer 
organizations attribute this to the presence of labor laws 
that restrict downsizing.  To circumvent such laws, private 
sector companies continued hiring workers on a contract 
basis.  The informal sector, where the workforce generally 
does not enjoy legal protection, witnessed more growth. 
Official statistics put the unemployment rate at 9.2 percent, 
but unofficial estimates suggest it could be as high as 20 
percent. 
 
HIV/AIDS in the Workplace 
 
According to the National AIDS Control Organization (NACO), a 
government agency under the Ministry of Health and Family 
Welfare, nearly 90 percent of the 5.13 million Indians 
currently estimated to be infected with HIV/AIDS are in the 
15-49 age group, the prime of their working years.  HIV/AIDS 
has a negative impact on individual workers and their 
families as well as on the economy has a whole.  NACO and the 
ILO, in conjunction with industrial, workers,, and 
employers, organizations, are collaborating to respond to 
the problem of HIV/AIDS in the workplace, using the ILO Code 
of Practice on HIV/AIDS as a guideline.  The code includes 
the following: recognition of HIV/AIDS as a workplace issue, 
non-discrimination, gender equality, social dialogue, no 
screening of HIV/AIDS at the workplace, confidentiality, 
continuing the employment relationship, prevention, and care 
and support. 
 
The Steel Authority of India, the Employees State Insurance 
Scheme, and Indian Railways are among the organizations and 
associations that NACO has worked with to implement HIV/AIDS 
programs in the workplace.  In addition, the Confederation of 
Indian Industries (CII) founded an &Indian business trust8 
to combat HIV/AIDS in the workplace and has begun programs in 
its 22 branches across India.  The Lawyers, Collective, an 
NGO, has successfully defended workers who lost their jobs 
due to their HIV/AIDS status. 
 
II. DESCRIPTION OF THE LABOR SCENE 
 
A.Government 
The central and state governments share jurisdiction over 
labor issues.  Both may enact legislation concerning the 
following: trade unions, industrial and labor disputes; 
social security, insurance, employment, and unemployment; and 
welfare of labor including conditions of work, provident 
funds, pensions, and maternity benefits.  Only the central 
government may enact legislation concerning regulation of 
safety in mines and oil fields, industrial disputes 
concerning central government employees, and central 
government agencies and institutions for vocational training. 
 
The Ministry of Labor, a Cabinet-level ministry, is the lead 
central governmental agency on labor issues.  The Ministry is 
headquartered in New Delhi and has subsidiary offices located 
throughout the country.  The Main Secretariat of the Ministry 
consists of eight divisions: social security, emigration, 
industrial relations, child and women labor, labor welfare, 
economics and statistics, international labor affairs, and 
labor conference.  Each state government also has a labor 
ministry that may implement legislation of labor laws within 
its jurisdiction. 
The Labor Bureau, created in 1946 as part of the Ministry of 
Labor, is responsible for the collation, collection, and 
publication of statistics and related information on wages, 
earnings, productivity, absenteeism, labor turn-over, 
industrial relations, and working and living conditions. It 
also tracks important economic indicators like the Consumer 
Price Index, data concerning industrial, agricultural and 
rural laborers; wage rate indices; and data on industrial 
relations and socio-economic conditions in the organized and 
unorganized sectors of industry. 
 
In April 2000, USDOL signed a Memorandum of Understanding 
with the Indian Ministry of Labor to provide technical 
assistance in five areas: the elimination of child labor, 
prevention of HIV/AIDS in the workplace, improvement in mines 
safety, provision of decent employment for women, and labor 
market information systems.  A subsequent agreement between 
the two governments resulted in the INDUS project, a joint 
U.S.-India partnership to eliminate hazardous and 
exploitative child labor, towards which each government has 
contributed 20 million dollars.  The project is focused on 
removing children from ten specific industries in India: bidi 
cigarettes, brassware, bricks, fireworks, footwear, bangles, 
locks, matches, quarried stones and silk.  Thus far, the 
joint project has enrolled more than 44,000 child laborers 
and at-risk youths in education and training programs.  The 
only area of the MoU without a technical assistance program 
is labor market information systems.  This was originally due 
to US sanctions after India,s 1998 nuclear tests, but now 
reflects a lack of resources. 
 
B.Employers 
The Council of Indian Employers (CIE) is a confederation of 
three smaller employer organizations: the All India 
Organisation of Employers (AIOE), the Employers, Federation 
of India (EFI), and the Standing Conference of Public 
Enterprises (SCOPE).  The CIE is not registered under any Act 
of the Government, but AIOE, EFI, and SCOPE are all 
registered as individual organizations.  Total membership in 
AIOE and EFI consists of 80 regional associations of 
employers or chambers of commerce and 322 public and private 
companies.  SCOPE covers 240 public sector undertakings 
(PSUs). 
 
The CIE,s primary objective is to interact with the GOI in 
formulating labor, economic, and social welfare policies that 
concern workers and employers.  It also aims for increased 
cooperation between employers, and workers, organizations 
and holds regular meetings with the trade union centrals to 
accomplish this.  The CIE is represented on almost all 
Government Advisory Boards, is affiliated with the 
International Organization of Employers, and represents India 
at the ILO. 
 
C.Trade Unions 
According to the latest census taken in 2001, approximately 
403 million persons constitute India,s active work force. 
Approximately 28 million of these workers are employed in the 
formal, or organized, sector.  The rest are overwhelmingly 
agricultural workers, and to a lesser extent, urban 
non-industrial workers.  While some trade unions represent 
agricultural and informal sector workers, the majority of 
India,s estimated 13-15 million union members are part of 
the formal sector. 
 
Of these 13 to 15 million unionized workers, some 80 percent 
are members of unions affiliated with 1 of the 5 major trade 
union centrals.  These include the Bharatiya Mazdoor Sangh, 
Indian National Trade Union Congress, Center of Indian Trade 
Unions, Hind Mazdoor Sabha, and the All India Trade Union 
Congress.  By U.S. standards, all of these major trade union 
centrals are &politicized,8 i.e., they are either directly 
linked or ideologically associated with a political party. 
However, since many Indians now view party identification as 
detrimental to trade union interests, all centrals stress 
their independence and in some cases are attempting to reduce 
or sever previously tight party control. 
 
Total membership in unions affiliated with the national 
centers has remained essentially static in the face of an 
annual growth in the work force of 7-8 million.  Union 
members account for approximately two percent of the overall 
work force. Unions remain concentrated in the public sector, 
and labor leaders have not made serious efforts to organize 
workers in the new Indian and foreign companies in the 
private sector.  Although a few significant examples exist, 
independent unions are not a major factor. 
 
All five major trade union centrals participate in ILO 
activities.  In addition, local unions participate in ILO 
programs such as Organizing in the Informal Sector, Campaigns 
on Eradication of Child Labor, Tripartite Response on 
Discrimination at Workplace on HIV, and Promotion of the Core 
Labor Standards in Enterprise. 
 
III. Programs Providing Workers with a Social Safety Net 
 
India lacks a comprehensive social security system.  In the 
informal sector, which employs the vast majority (93 percent) 
of Indian workers, there is no social security protection for 
unemployed or retired workers. 
 
The Employees, State Insurance Corporation (ESIC) provides 
social protection to workers (and their dependents) in the 
organized sector in case of sickness, maternity, and death or 
disablement due to an employment injury or occupational 
hazard.   In most states, employees in the following classes 
of establishments are eligible for coverage: non-seasonal 
factories using power and employing 10 or more persons; 
non-seasonal and non-power using factories, shops, hotels, 
restaurants, cinemas, preview theatres, motor transport 
undertakings and newspaper establishments employing 20 or 
more persons. 
 
Employees covered under the scheme are entitled to medical 
facilities for themselves and their dependents, as well as 
cash benefits in the event of specified contingencies 
resulting in loss of wages or earning capacity.  Insured 
women are entitled to maternity benefits to cover the period 
of confinement. When an employment injury causes the death of 
an insured employee, the dependents are entitled to a family 
pension. 
 
The ESI Scheme is financed by contributions from covered 
employees and their employers. The State Governments bear 
one-eighth of the share of expenditure on medical benefits 
within the per capita ceiling of Rs.600 ($14) per year and 
all additional costs beyond the ceiling. Employee 
contributions are tied to a fixed percentage of the workers 
wages, but benefits are provided according to individual 
needs regardless of employee contributions. 
 
IV. Major Labor Laws 
 
India is a founding member of the International Labor 
Organization and has ratified 39 total ILO Conventions.  Of 
the eight core ILO Conventions, India has ratified four: the 
Conventions on Forced Labor (No. 29), Equal Remuneration (No. 
100), Abolition of Forced Labor (No. 105), and Discrimination 
(Employment and Occupation) (No. 111).  India has not 
ratified the remaining four core conventions on Freedom of 
Association and Protection of the Right to Organize (No. 87), 
Right to Organize and Collective Bargaining (No. 98), Minimum 
Age Convention (No. 138), and Worst Forms of Child Labor (No. 
182). 
 
A.Industrial Disputes Act 
 
The Industrial Disputes Act (1947) regulates reductions in 
force (RIF) and plant closures.  It requires state approval 
90 days before large firms (more than 100 employees) lay off 
employees.  Likewise, no plant employing more than 100 
employees can shut down without obtaining approval 90 days 
before the closure date.  Laws also prohibit firms from 
employing contract laborers for extended periods of time 
without extending permanent employment. 
 
B.Factories Act 
 
The Factories Act (1948) mandates a maximum 9-hour workday 
and 48-hour workweek, as well as minimum working conditions. 
Workers are to be paid twice their regular wage rate for 
working overtime. State government laws set minimum wages, 
hours of work, and safety and health standards. These 
standards were generally enforced and accepted in the modern 
industrial sector; but were not observed in less economically 
stable industries. However, the large number of industries 
covered by a small number of factory inspectors and the 
inspectors' limited training and prevalence of bribery 
resulted in lax enforcement. 
 
Minimum wages varied according to the state and sector of 
industry. Such wages were inadequate to provide a decent 
standard of living for a worker and his/her family. Most 
workers employed in units subject to the Factories Act 
received more than the minimum wage, including mandated 
bonuses and other benefits.  The state governments set a 
separate minimum wage for agricultural workers but did not 
enforce it effectively.  Some industries, such as the apparel 
and footwear, did not have a prescribed minimum wage in any 
of the states in which they operated. 
 
C.The Right to Association 
 
The Constitution provides for the right of association, and 
the Government generally respected this right in practice. 
Workers may establish and join unions of their own choosing 
without prior authorization.  In practice, legal protections 
of worker rights were effective only for the organized 
industrial sector.  Outside the modern industrial sector, 
laws were difficult to enforce.  The authorities generally 
prosecuted and punished those persons responsible for 
intimidation or suppression of legitimate trade union 
activities when the victims were members of nationally 
organized unions.  Unaffiliated unions were not able, in all 
instances, to secure for themselves the protections and 
rights provided by law.  Union membership was rare in the 
informal sector. 
 
The Trade Union Act prohibits discrimination against union 
members and organizers, and employers were penalized if they 
discriminated against employees engaged in union activities. 
 
D.The Right to Organize and Bargain Collectively 
 
The law provides for the right to organize and bargain 
collectively.  Collective bargaining is the normal method 
used to set wages and settle disputes in unionized plants in 
the organized industrial sector.  Trade unions vigorously 
defended workers, interests in this process.  Although a 
system of specialized labor courts adjudicates labor 
disputes, there were long delays and a backlog of unresolved 
cases. When the parties are unable to agree on equitable 
wages, the Government may establish boards of union, 
management, and government representatives to determine 
wages.  The legislation makes a clear distinction between 
civil servants and other workers.  Public service employees 
have very limited organizing and collective bargaining 
rights. 
 
Trade unions often exercised the right to strike, but public 
sector unions were required to give at least 14 days' notice 
prior to striking.  Some states have laws requiring workers 
in certain nonpublic sector industries to give notice of a 
planned strike. 
 
The Essential Services Maintenance Act allows the Government 
to ban strikes in government-owned enterprises and requires 
conciliation or arbitration in specified essential 
industries; however, essential services never have been 
defined in law.  Legal mechanisms exist for challenging the 
assertion that a given dispute falls within the scope of this 
act.  The act thus is subject to varying interpretations from 
state to state.  State and local authorities occasionally use 
their power to declare strikes illegal and force 
adjudication.  The Industrial Disputes Act prohibits 
retribution by employers against employees involved in legal 
strike actions, and this prohibition was observed in 
practice. 
 
The Kerala High Court declared in 2002 that all general 
strikes were illegal and that all protest organizers would be 
liable for losses caused by shutdowns.  The Supreme Court 
upheld the verdict, drawing attention to the difference 
between a complete closedown of all activities and a general 
strike.  While it is likely that the ruling was aimed at 
limiting general strikes with purely political motives, 
unions stated that it remained a potential threat to their 
activities. Other court rulings also declared such strikes 
illegal and made striking workers pay damages to consumers 
and the public who suffered due to the strikes.  In August 
2003, the Supreme Court declared all strikes by government 
employees illegal; however, in practice this was not 
enforced. 
 
E.Prohibition of Forced or Compulsory Labor 
 
The Constitution prohibits forced or bonded labor, including 
by children; however, such practices continued to be 
prevalent in India and were found primarily among the 
agricultural and rural unorganized workforce. The Bonded 
Labor System (Abolition) Act prohibits all bonded labor by 
adults and children. Offenders may be sentenced up to three 
years in prison, but prosecutions were rare.  Enforcement of 
this statute, which was the responsibility of state and local 
governments, varied from state to state and often was not 
effective due to inadequate resources and to societal 
acceptance of bonded or forced labor.  On the occasions when 
inspectors referred violations for prosecution, long court 
backlogs and inadequate funding for legal counsel frequently 
resulted in acquittals. 
 
The GOI does not publish official statistics on bonded labor, 
but it claims to have identified and rescued about 285,000 
bonded laborers, and rehabilitated approximately 265,000, 
since the advent of the Bonded Labor System (Abolition) Act 
of 1976.  Many NGOs, however, claim that these numbers do not 
reflect the actual magnitude of the problem.  They estimate 
that there were 20 to 65 million bonded laborers in the 
country, including a large number of children.  According to 
a Government report, more than 85 percent of bonded laborers 
belonged to scheduled castes and scheduled tribes.  In 2002, 
the Tamil Nadu state government began planning and 
implementing rehabilitation programs after press reports 
indicated that the presence of 25,800 bonded laborers in the 
state, while government officials worked to release bonded 
laborers in many other states.  Despite these efforts, NGOs 
believe that the GOI,s actions have not effectively resolved 
the problem of forced/bonded labor. 
 
F.Status of Child Labor Practices and Minimum Age for 
Employment 
 
The Government prohibits forced and bonded child labor; 
however, this prohibition was not effectively enforced, and 
forced child labor continued to be a problem.  The law 
prohibits the exploitation of children in the workplace. 
However, National Human Rights Commission (NHRC) officials 
have admitted that implementation of existing child labor 
laws was inadequate, that administrators were not vigilant, 
that children were particularly vulnerable to exploitation, 
and that the Commission was focusing on the adequacy of 
existing legislation. 
There is no overall minimum age for employment.  However, 
work by children under 14 years of age was barred completely 
in "hazardous industries," which included passenger goods and 
mail transport by railway, and in factories.  The NDA 
government resolved to end child labor in hazardous 
industries by the year 2007, and the UPA government is 
working towards that goal.  In occupations and processes in 
which child labor is permitted, work by children was 
permissible only for 6 hours between 8 a.m. and 7 p.m., with 
1 day's rest weekly and two hours of education provided by 
the employer.  There was reasonable basis to believe that 
child labor was used to produce hand-knotted carpets, 
gemstone polishing, leather goods, sporting goods, and many 
hand-made products.  Children are also used as domestic help 
throughout the country. 
 
Estimates of the number of child laborers varied widely. The 
provisional results of the Government census of 2001 put the 
number of child workers at 12.5 million.  However, the ILO 
estimated the number at 44 million and Global March Against 
Child Labor, an NGO, claims there are 60 million.  The 
government does not provide free, compulsory, and universal 
primary education, and most, if not all, children who did not 
attend school did housework, worked on family farms, worked 
alongside their parents as paid agricultural laborers, or 
worked as domestic servants.  Though the Government's 
statistics from 2003 claim that 165 million of the 200 
million children between the ages 6-14 attend school, UNICEF 
reported that approximately 120 million of the primary 
school-age population of approximately 203 million attended 
school. 
 
The enforcement of child labor laws was the responsibility of 
the state governments; however, enforcement was inadequate 
and uneven among states, especially in the informal sector in 
which most children were employed.  The continuing prevalence 
of child labor was attributable to social acceptance of the 
practice, to the failure of the state and federal governments 
to make primary school education compulsory, ineffective 
state and federal government enforcement of existing laws, 
and economic hardships faced by families.  In addition, 
over-worked and ill-trained local magistrates are charged 
with the competing mandate of collecting state taxes from the 
businesses that employ child or bonded laborers. 
 
Government efforts to eliminate child labor affected only a 
small fraction of children in the workplace. The Government 
assisted working children through the National Child Labor 
Project, which was established in more than 3,700 schools. In 
January 2004, the GOI increased the number of its National 
Child Labor Projects from 50 to 100, and intends to add 
another 100 by March 2005.  The Indus project -- jointly 
funded by the U.S. Department of Labor and the GOI and 
implemented by the ILO  -- was launched in February 2004.  It 
hopes to remove 80,000 children from hazardous work 
situations in 20 districts of the country over a three-year 
period. 
 
The Government also cooperated with UNICEF, the United 
Nations Educational, Scientific and Cultural Organization 
(UNESCO), the United Nations Development Programme (UNDP), 
and the ILO in their efforts to eliminate child labor.  The 
Government participated in the ILO's International Program on 
the Elimination of Child Labor (IPEC).  Approximately 145,000 
children have been removed from work and received education 
and stipends through IPEC programs since they began in the 
country in 1992.  The NHRC, continuing its own child labor 
agenda, organized NGO programs to provide special schooling, 
rehabilitation, and family income supplements for children in 
the glass industry in Firozabad.  In addition, employers in 
some industries took steps to combat child labor. 
 
A 1986 Supreme Court decision increased penalties for 
employers of children in hazardous industries to $430 (Rs 
20,000) per child employed, and established a welfare fund 
for formerly employed children funded by using the 
employers, fines.  In addition, the decision requires the 
Government to find employment for an adult member of the 
child's family or pay it $108 (Rs 5,000).  According to the 
South Asian Coalition on Child Servitude, the authorities 
were pursuing some 6,000 cases against employers. 
 
G.Occupational Health and Safety Standards 
 
Occupational Safety and Health (OSH) remains a problem area 
in India.  Extensive legislation covering various aspects of 
OSH notwithstanding, industrial accidents continued to occur 
frequently due to lack of proper enforcement.  The chemical 
sector is the most prone to accidents.  The lack of awareness 
regarding occupational health has resulted in many deaths 
throughout the country.  OSH in the state-controlled mining 
industries is of significant concern.   The USDOL has funded 
an approximately 1.5 million-dollar project to improve safety 
standards in selected public sector mines and to provide 
training to mine inspectors.  The project improved working 
conditions in five selected pilot mines and drastically 
reduced accident rates.  In addition, the project helped the 
Indian Directorate General of Mines Safety establish for the 
first time a computerized mine inspection system that 
significantly reduced the time needed by mine inspectors to 
inspect a mine. 
 
Industrial accidents continued to occur frequently due to 
improper enforcement of existing laws.  Chemical industries 
were the most prone to accidents.  According to the Director 
General of Mines' safety rules, mining companies must seal 
the entrances to abandoned underground mines, and bulldoze 
and reforest opencast mines.  However, these rules seldom 
were obeyed.  In June, flooding of a mine killed 17 miners in 
Andhra Pradesh.  Safety conditions generally tended to be 
better in the SEZs than in the manufacturing sector. 
 
The law does not provide workers the right to remove 
themselves from work situations that endanger health and 
safety without jeopardizing their continued employment. 
Legal foreign workers were protected under these laws; 
however, illegal foreign workers had no protection. 
 
H.Discrimination in Employment 
India has ratified ILO Conventions on Equal Remuneration (No. 
100) and Discrimination (Employment and Occupation) (No. 
111).  The Constitution prohibits discrimination on the basis 
of a person's race, sex, religion, place of birth, or social 
status.  During 2004, government authorities worked to 
enforce these provisions with varying degrees of success. 
Despite laws designed to prevent discrimination, social and 
cultural practices as well as other legislation had a 
profound discriminatory impact, and discrimination against 
women, persons with disabilities, indigenous people, 
homosexuals, and national, racial, and ethnic minorities was 
a problem.  The traditional caste system, as well as 
differences of ethnicity, religion, and language, deeply 
divided the society. 
 
1.Women 
The participation of women in the formal labor force is much 
less than that of males (33 percent vs. 67 percent).  The 
promotion of women to managerial positions within businesses 
often was slower than that of males.  The Equal Remuneration 
Act of 1976 mandates that men and women performing the same 
job receive the same payment; however, enforcement was often 
weak, especially in rural areas where traditions encouraging 
discrimination against females were deeply rooted.  In both 
rural and urban areas, women were paid less than men were for 
the same job.  Women experienced economic discrimination in 
access to employment and credit, which acted as an impediment 
to women owning businesses.  In a positive development, 
state-supported  microcredit programs for women began to have 
an impact in many rural districts. 
Sexual harassment was common, with a vast majority of cases 
unreported to authorities. In June 2004, the National 
Commission for Women (NCW) and the Press Institute of India 
jointly released a report that found that a majority of women 
experienced gender discrimination at their workplaces. 
Often, attempts by women to report harassment resulted in 
further problems or dismissal.  On April 27, 2004, the 
Supreme Court determined that a victim of sexual harassment 
could be awarded compensation based on the findings of an 
internal departmental report or investigation of the case. 
 
2.Dalits, Scheduled Castes, and Scheduled Tribes 
The Constitution and the 1955 Civil Rights Act outlaws the 
practice of untouchability, which discriminates against 
Dalits (formerly called &untouchables8) and other people 
defined as Scheduled Castes.  According to the 2001 census, 
scheduled castes, including Dalits, made up 16 percent (166.6 
million) of the population, and scheduled tribes (members of 
indigenous groups outside the caste system) were 8 percent 
(84.3 million) of the country's population.  Despite 
longstanding efforts by the Government to eliminate the 
discriminatory aspects of caste, discrimination based on the 
caste system occurred throughout the country during the 
reporting period. 
 
The GOI uses a system of "reservations," similar to 
affirmative action programs in the US, in an attempt to 
decrease employment-based discrimination towards these 
scheduled castes and scheduled tribes.  The 
Anti-Untouchability Act of 1955 and the Prevention of 
Atrocities Act of 1989 give further protection; however, 
Dalits are often relegated to the most menial of jobs. 
Employment discrimination against Dalits is widespread in 
rural areas; many rural Dalits worked as agricultural 
laborers for caste landowners without remuneration.  The 
majority of bonded laborers were Dalits.  Those who attempt 
to change the status quo regularly faced violence.  Low caste 
Hindus who converted to Christianity lost their eligibility 
for affirmative action programs.  Some states reserved 
government jobs for Muslims of low caste descent. 
 
3.Persons with Disabilities 
Although the Persons with Disabilities Act provides equal 
rights to all persons with disabilities, advocacy 
organizations admitted that its practical effects have so far 
been minimal, in part due to a clause that makes the 
implementation of programs dependent on the "economic 
capacity" of the Government.  Widespread discrimination 
occurred against persons with physical and mental 
disabilities in employment, education, and in access to 
health care. 
 
I.Special Economic Zones 
 
In 2000, the GOI converted India,s seven government 
controlled Export Processing Zones to Special Economic Zones 
(SEZs), and the private sector set up an eighth SEZ.  All 
SEZs must follow labor laws.  While SEZ workers enjoy freedom 
of association and collective bargaining, trade union 
activity in the zones has been negligible.  Entry into the 
SEZs ordinarily is limited to employees, and union organizers 
claim that such restrictions make it difficult for them to 
organize workers.  In addition, unions have not vigorously 
pursued efforts to organize private-sector employees since 
SEZs were established in 2000.  Women constituted the 
majority of the work force in the SEZs.  The International 
Confederation of Free Trade Unions reported that industries 
in the SEZs compelled their workers to work overtime, often 
employed them on temporary contracts with fictitious 
contractors, and threatened those that complained about 
substandard working conditions. 
 
In August 2003, the Government of Madhya Pradesh enacted a 
law to allow companies in the Indore SEZ to hire and fire 
workers and to close down units without prior government 
permission.  In November 2003, the Government of Maharashtra 
passed a similar act, exempting SEZs from labor laws 
applicable in the rest of the state.  This act also prohibits 
more than one union from representing workers in a single 
unit to prevent inter-union rivalry. 
 
J.Labor Law Reforms 
 
Many observers believe that India,s labor laws are 
antiquated and in need of reform.  The second National Labor 
Commission (NLC), established by the GOI in September 1999, 
submitted its report in June 2002.  It recommended reviews of 
Indian labor laws and the social security system and the 
strengthening of governmental programs to eradicate child 
labor.  Although the NLC recommendations are not binding on 
the government, the Ministry of Labor has begun consulting 
various social partners on their possible implementation. 
Unlike the previous NDA government, the UPA has not made 
labor law reform a top priority.  Considering the lack of 
consensus within and outside the government to reform, most 
observers do not expect large-scale changes to existing labor 
legislation. 
 
V. Industrial Relations 
 
A.Sectoral Issues 
 
Airlines: Labor-management relations were calm in the 
government-owned airlines, with pilots in both government-run 
carriers -- Air India (international) and Indian Airlines 
(domestic) -- receiving pay and benefit increases.   The GOI 
initially planned to offer low equity participation to 
private partners, with restrictions on foreign investment, 
which would have deterred private partners from bidding for 
the national carriers.  Now, the GOI has changed its policy 
and is no longer planning to sell equity in the airlines. 
 
Financial services: The banking and insurance sectors are 
highly unionized and predominantly state-owned.  During the 
reporting year, workers in the banking sector held three 
one-day strikes to demand better working conditions.  Bank 
employees in the public sector banks successfully negotiated 
a 13 per cent wage increase with retroactive implementation 
to November 2002.  Insurance sector workers held two one-day 
strikes to support other unions protesting government 
economic policies. 
 
B.Regional Reviews 
 
Northern Region: Industrial and employment growth in the 
northern region was sluggish, due primarily to the absence of 
reforms in the agricultural sector. Infrastructure shortfalls 
and concerns regarding effective governance has kept 
investment low in the region, particularly in Uttar Pradesh, 
India,s most populous state.  There was no significant labor 
unrest in the region during the reporting year.  The Delhi 
state government relaxed working conditions for women in the 
IT sector by permitting them to work in night shifts.  Punjab 
and Haryana subsequently adopted the same measure. 
 
In February 2004, the then federal labor minister announced 
that Delhi would become a child labor free state by December 
2005.  Most observers believe this target will not be 
achieved. 
 
Eastern Region: Industrial relations in the12 states of 
Eastern India remained more or less peaceful, barring a few 
incidents of lockouts and violence in the tea gardens of West 
Bengal and Assam.  A strike planned by the Assam Cha Mazdoor 
Sangh (Assam Tea Workers, Union) in July was cancelled after 
the state government assured the organization of a tripartite 
settlement.  Workers in 18 tea gardens belonging to the 
state-owned Assam Tea Corporation have not received wages for 
the past year.  The West Bengal State government averted a 
strike by West Bengal jute mill workers in November by 
brokering a tripartite wage agreement. 
 
West Bengal industries minister Nirupam Sen indicated that 
there has been a net reduction of 200,000 organized sector 
jobs in West Bengal over the past five years.  The Orissa 
Government is working on a voluntary retirement scheme (VRS) 
for its ailing public sector units.  Other state governments 
in the region have not initiated labor reform measures. 
Barring Assam, where there is public sector investment in the 
oil sector, state governments continue to be the biggest 
employers throughout the northeast region. 
During the period under review, the Government of West Bengal 
continued its on-going process of selling government-owned 
assets by privatizing 16 ailing public sector units and 
offering the workers a VRS underwritten by the British 
overseas development-funding agency DFID. 
 
The West Bengal State Government estimated that children made 
up 3.1 percent of the state,s total workforce, with about 11 
percent or 1.2 million of the children in the 5-14 age group, 
and with the help of UNICEF, developed an Action Plan to 
address the problem.  In West Bengal and elsewhere in the 
region, children continue to be employed in brick making, 
&bidi8 (tobacco) binding, and agricultural labor.  In the 
urban areas, they were employed as domestic workers, in shops 
and offices, in the large informal service sector (tea 
stalls, wayside restaurants and kiosks), or in hazardous jobs 
such as scavenging and rag picking.  The USG is giving 
financial support to leading NGOs such as CINI (Child-in-Need 
Institute), Asha, and Tiljala Shed to provide these children 
with preparatory coaching and enroll child laborers and 
potential child laborers in school.  All states in the region 
have strict laws banning the use of child labor, but 
enforcement remains poor. 
 
The Center of Indian Trade Unions (CITU) -- the trade union 
wing of the Communist Party of India (Marxist) -- has been 
subdued in recent years, as West Bengal Chief Minister 
Buddhadeb Bhattacharjee has discouraged &aggressive 
unionism8 to create an industry-friendly atmosphere. 
Although CITU membership has increased in West Bengal, CITU 
noted a 10 percent decline in its Calcutta membership. 
 
Southern Region: South Indian states experienced a generally 
peaceful labor situation during the reporting period, with no 
major prolonged strikes in any sector.  Kerala, the smallest 
southern state, experienced the most significant strike 
activity, while Karnataka had the least. 
 
About 216 longshoremen of Chennai Container Terminal Limited 
(CCTL) at the Chennai Port went on strike from May 23 to June 
6, protesting privatization of the terminal and causing some 
inconvenience to business.  A seven-day truckers, strike 
called by the All India Motor Transport Congress (AIMTC) was 
largely unobserved and ended on August 28.  Tamil Nadu 
lawyers went on strike on June 30 to prevent the bifurcation 
of the Madras and Madurai benches, but ended the action on 
September 1 without achieving its demand.  About 43,000 
workers of the Singareni Collieries in Andhra Pradesh struck 
on November 24, causing a production loss of 47,000-mt of 
coal. 
 
Home to leftist parties and trade unions, Kerala experienced 
several general strikes during the past year.  Although 
courts have declared general strikes to be illegal, activists 
have sometimes paralyzed economic activity by organizing work 
stoppages under other names. 
 
Regional state governments initiated some significant labor 
reform measures.  In May 2004 in Tamil Nadu and Karnataka and 
August 2003 in Kerala, State governments implemented 
provisions allowing women to work in night shifts, 
particularly in the IT industry.  In February 2004 in Andhra 
Pradesh and June 2004 in Tamil Nadu, new provisions allowed 
industries to hire contract labor even in core areas for 
temporary periods to meet market demand. 
 
Although achievement of this goal seems unrealistic, the 
international community, particularly the ILO, is supporting 
the efforts of the southern states to end all child labor by 
2007, in hopes that this will set an example for other 
states.  As part of their programs to combat child labor, the 
southern states are increasing education programs for working 
children, particularly those in the informal sector. 
 
The Tamil Nadu government hopes to eradicate child labor in 
hazardous employment by 2005 and non-hazardous employment by 
2007.  It prepared an Action Plan, established a state 
authority on the eradication of child labor headed by the 
Chief Secretary, is reviewing proposals submitted by district 
collectors, and has allotted $333,332  (Rs. 15 million) to 
fund them. 
 
Tamil Nadu created an Additional Commissioner position in its 
Labor Department to head a Child Labor Monitoring Cell.  It 
also organized a Child Labor Monitoring System Workshop in 
collaboration with the ILO in February 2004, demonstrated a 
web based monitoring system, and observed &Anti Child Labor 
Day8 on June 12th.  The state is also considering an 
incentive scheme to encourage village level administrators to 
establish child labor free areas, and it introduced a state 
award for the district collector who operates the best 
program for the rescue and rehabilitation of child laborers. 
The Women,s Development Corporation also formed about 1,000 
self-help-groups for mothers of child laborers. 
 
Western Region: There were no significant work stoppages by 
industrial workers during calendar years 2003 and 2004 in 
Western India (including Mumbai).  On May 21, 2003, 69 unions 
representing workers from aviation, hospitality, banking, 
textiles, insurance, engineering, and transportation called 
for a general strike, but only bank employees in Mumbai and 
port workers at Mumbai and Jawaharlal Nehru Port Trusts 
honored the strike call.  When various trade unions again 
called for a general strike on February 25, 2004, only bank 
and public sector insurance workers walked out. 
 
In July 2003, the Government of Maharashtra (GOM) announced a 
new labor policy for the IT industries which permits 
24-hour-a-day operations, the closure of units employing up 
to 1,000 workers without prior government permission, and 
self-certified reports of compliance with labor laws. 
 
VI.Potential for Expanding Trade and Investment with the US 
 
Tariffs and poor infrastructure present the biggest obstacles 
to foreign investment and growth, but India,s infrastructure 
requirements also present trade and investment opportunities 
for American companies.  Although the average level of Indian 
tariffs has declined significantly since the early 1990s, 
India,s economy remains on the most protected in the world. 
India,s average non-agricultural tariff is about 22 percent, 
compared to the 11 percent median for other emerging markets, 
according to the World Bank.  India controls foreign 
investment with limits on equity and voting rights, mandatory 
government approvals, and capital controls. Although the GOI 
has gradually relaxed some of these constraints, foreign 
direct investment is still prohibited in some sectors or 
sub-sectors. 
 
The communist and socialist parties that support the UPA 
government oppose the privatization of state-owned companies 
and increasing foreign direct investment, and have blocked or 
slowed UPA attempts to relax restrictions in these areas. 
Other factors that inhibit an otherwise &business-friendly8 
environment include India,s vast and still largely 
unreformed bureaucracy and various forms of social tension 
(some manifested violently) in a huge and extremely diverse 
population, much of which suffers from extreme poverty and 
the burdens of underdevelopment. 
 
VII. Directory of Labor Organizations 
 
A.Government 
 
Ministry of Labor and Employment 
 
Shram Shakti Bhawan, 
Rafi Marg, New Delhi - 110 001 
Phone:  91 11 2300 1425 
Fax:  91 11 2371 8730 or 2335 5679 
Minister of Labor: Mr. K. Chandrasekhar Rao 
 
Labor Bureau 
 
      Shri Balram 
      Director General 
      Phone:  91 17 7280 3584 
      Email: Dglb@hub.nic.in 
      http://labourbureau.nic.in/ 
 
Census of India 
 
      Office of the Registrar General, India 
2A, Mansingh Road 
New Delhi ) 110 011 
http://www.censusindia.net/ 
 
 
B.Employers 
 
Council of Indian Employers 
Federation House 
Tansen Marg 
New Delhi ) 110001 
Phone:  91 11 2373  8760-70 or 2331 6121 
Fax:  91 11 2332 0714 or 372 1504 
Email: aioe@ficci.com 
 
All India Organisation of Employers (AIOE) 
Phone:  91 11 2373 8760-70 or 2331 6121 
Fax:  91 11 2332 0714 
Email: bppant@mantraonline.com or secretariat@mantraonline.com 
      President: Mr. O.P. Lohia 
Secretary: Mr. B.P. Pant 
 
SIPDIS 
 
Employers, Federation of India (EFI) 
Phone:  91 22 2284 4093 or 2284 4232 
Fax:  91 22 2284 3028 
President: Mr. R. K. Somany 
Email: somany.hindware@gndel.global.net.in 
Secretary-General: Mr. Sharad S. Patil 
 
SIPDIS 
 
Standing Conference of Public Enterprises 
Phone:  91 11 2436 2604 
Fax:  91 11 2436 1371 
Email: scope dg@yahoo.co.in 
Chairman: Mr. C.P. Jain 
 
C.Trade unions 
 
Bharatiya Mazdoor Sangh (BMS) 
Aligned with the Bharatiya Janata Party (BJP) 
 
Ram Naresh Bhavan, Chuna Mandi, Tilak Marg 
      Paharanj, New Delhi ) 110055 
      Phone:  91 11 2363 4212 
      Fax:  91 11 2362 0654 
      President: Mr. Hasubhai Dave 
      General Secretary: Mr. Uday Patwardhan 
 
Indian National Trade Union Congress (INTUC) 
Aligned with Indian National Congress Party (Congress) 
Affiliated to International Center of Free Trade Unions 
(ICFTU) 
 
      Shramik Kendra, 4, Bhai Veer Singh Marg 
      New Delhi ) 110001 
      Phone:  91 11 2374 7768 
      Fax:  91 11 2336 4244 
      President: Mr. G. Sanjeeva Reddy 
      General Secretary: Mr. Rajendra Prasad Singh 
 
Hind Mazdoor Sabha (HMS) 
Aligned with the Janata Dal Party (JD) 
Affiliated to ICFTU 
 
      120, Babar Road 
      New Delhi ) 110001 
      Phone:  91 11 2341 3519 
      Fax:  91 11 2341 1037 
      President: Mr. Thampan Thomas 
      General Secretary: Mr. Umraomal Purohit 
 
Center of Indian Trade Unions (CITU) 
Aligned with the Communist Party of India (Marxist), (CPI-M) 
 
      B.T. Ranadive Bhavan 
13 A, Rouse Avenue 
      New Delhi ) 110002 
      Phone:  91 11 2322 1288 
      Fax:  91 11 2322 1284 
      President: Dr. M.K. Pandhe 
 
All India Trade Union Congress (AITUC) 
Aligned with the Communist Party of India (CPI) 
Affiliated to the World Federation of Trade Unions (WFTU) 
 
      24, Canning Lane 
      New Delhi ) 110001 
      Phone:  91 11 2338 7320 
      Fax:  91 11 2338 6427 
      General Secretary: Mr. Gurudas Dasgupta 
 
 
D.NONGOVERNMENTAL ORGANIZATIONS 
 
International Labor Organization 
 
Theatre Court, 3rd Floor, 
India Habitat Centre, 
Lodi Road 
New Delhi - 110 003 
Phone:  91 11 2460 2101 
Fax:  91 11 2460 2111 
E-mail: delhi@ilodel.org.in 
 
South Asia Research and Development Initiative 
 
      CA-1-D, Munirka, Phase-2 
New Delhi 110 067 
      Phone:  91 11 2618 0038 
Fax:   91 11 2618 1578 
E-mail: ashutosh@sardi.org 
            sardi@del6.vsnl.net.in 
 
 
 
VIII.Key Sources 
 
Census of India, 2001. http://www.censusindia.net 
 
CIA World Factbook. 
http://www.cia.gov/cia/publications/factbook/ 
International Confederation of Free Trade Unions. 
http://www.ictfu.org 
 
International Organization of Employers. 
http://www.ioe-emp.org/ioe emp/worldwide/ 
page pays html/asie/india.htm 
 
Indian Labour Bureau, Ministry of Labour. 
http://labourbureau.nic.in/ 
 
Indian Ministry of Labour. http://labour.nic.in/ 
 
National AIDS Control Organization (India). 
http://www.nacoonline.org/index.htm 
 
U.S Department of State. Background Notes. 
http://www.state.gov/r/pa/ei/bgn/3454.htm 
 
U.S. Department of State.  Trafficking in Persons Report. 
June 2005. http://www.state.gov/g/tip/rls/tiprpt/2005/ 
 
U.S. Department of State. Country Reports on Human Rights 
Practices 2004.  February 2005. 
http://www.state.gov/g/drl/rls/hrrpt/2004/ind ex.htm 
 
U.S. Foreign Commercial Service and U.S. Department of State. 
Doing Business in India: A Country Commercial Guide for U.S. 
Companies. 2004. 
 
IX.KEY LABOR INDICATORS: INDIA 2004 
 
Indicator                                   2003   2004 
Per capita GDP, current prices (US$)        543     602 
Consumer Prices (inflation rate) (%)        4.6     4.2 
GDP generated in agriculture (%)            23.6    22.1 
--, in manufacturing (%)                    28.4   21.7 
--, in services (%)                          48    56.2 
Population, total (millions)               1,073   1091 E 
--, by major ethnic groups (%) (2000 est) 
    Indo-Aryan                                  72     72 
    Dravidian                                25     25 
    Mongoloid and others                     3      3 
--, in major urban areas (%)                 28     28 
Population beneath the poverty level (%)     25     25 
Birth rate (per thousand population)         25     25 
Life expectancy at birth, total (years)    63.92   65.4 
--, male                                   62.92   63.9 
--, female                                 64.37   66.9 
Adult literacy rate (%)                     59.5    64.8 
Labor force, civilian, total (millions)402.5 (2001) 482.2 
(2004 est) 
--, male (%)                               67       66 
--, female (%)                             33       34 
--, in informal economy (%)                93       91 
--, completed primary education            n/a     n/a 
Employment, civilian, total (millions)     18.8    18.6 
--, in industry (%)                        12      11.7 
--, in special economic zones              n/a      n/a 
--, in agriculture(%)                     7.02      7.2 
--, in services (%)                       80.9      81 
--, in government (%)                      n/a      n/a 
Unemployment rate (%)                     9.1       9.2 
Underemployment rate (%)                  n/a       n/a 
Level of unionization of workforce (%)     7        n/a 
Labor productivity, manufacturing (% change) 6     7.4 
Number of work-related deaths              n/a      n/a 
Number of work-related injuries/illnesses  n/a     n/a 
Number of days lost from industrial disputes n/a    n/a 
Minimum hourly wage                        n/a      n/a 
Average hourly earning by major industry    n/a     n/a 
Supplementary benefits as % of earnings in manufacturing n/a 
Average hours worked per week in manufacturing  n/a n/a 
--, in agriculture                       n/a       n/a 
--, in services                           n/a      n/a 
n/a = not available 
exchange rate: US$=46.58 rupees (2003); =45.317 rupees (2004) 
 
End text. 
BLAKE