New labour codes: In a sweeping overhaul of India’s labour regime, the government has implemented four new labour codes 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). Effective November 21, 2025, the new framework marks a decisive shift from legacy rules, expanding worker protections and modernising employment practices.
Stock market experts said the changes could affect labour-intensive industries such as chemicals and paints, oil, autos and auto ancillaries, and pharmaceuticals. They added that a better work environment and stronger job security should lift employee productivity, which can support companies’ long-term financial health.
Manufacturing in spotlight
Assessing the impact on the Indian stock market, Sandeep Pandey, Co-founder of Basav Capital, said, “The four new labour codes will have a sizeable impact on the Indian stock market. The manufacturing space including chemicals and paints, pharma, oil, auto and auto ancillaries may see a reaction when markets open on Monday.”
Echoing this, SEBI-registered fundamental analyst Avinash Gorakshkar said, “These codes aim to enhance workplace conditions and job security. Improved employee performance should reflect in stronger company balance sheets over the long term.” On potential input-cost pressures for manufacturers, he added, “There will be a mutual impact. Input costs may rise, but not alarmingly. Higher productivity and output could offset the cost uptick.”
Stocks to watch
On likely movers after the labour code rollout, Pandey cited: Asian Paints in chemicals and paints; Hero MotoCorp and Bajaj Auto in autos; Larsen & Toubro (L&T) in infrastructure; Cipla, Dr. Reddy’s Laboratories, and Aurobindo Pharma in pharma; Tata Steel and JSW Steel in metals; and Reliance Industries in oil and petrochemicals. These 10 names could see sharp reactions when trading resumes on Monday.
Both experts said any dip in these stocks could be viewed as a long-term buying opportunity.
Old vs new: what’s changed
The new labour framework introduces significant shifts across employment, wages, safety, and compliance. Calling the decision “historic,” the Centre said the codes rationalise 29 existing labour laws, modernise regulation, and improve worker welfare building a future-ready workforce and more resilient industries under Aatmanirbhar Bharat.
Why a new labour code
Many of India’s labour statutes were drafted between the 1930s and 1950s well before today’s digital and gig economies. According to the government, this fragmented system created overlapping compliances, outdated processes, and limited protections for workers outside the formal sector.
“The Four Labour Codes replace this patchwork with a uniform, modern legal framework that the government says will create a workforce that is ‘protected, productive and aligned with the evolving world of work,’ paving the way for a more resilient, competitive and self-reliant nation,” it said.
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