Core Viewpoint - The recently announced labour codes in India aim to strengthen the workforce and support long-term economic growth by formalizing employment and protecting workers' rights [8]. Group 1: Employment Formalization - The government has increased the number of workers per unit from 100 to 300, formalizing employment for previously left-out workers [8][6]. - The new labour codes ensure that all workers receive benefits similar to enrolled employees, addressing the issue of informal employment [2][8]. Group 2: Modernization of Labour Laws - The Modi government's philosophy of "reform, perform and transform" has led to a comprehensive review and modernization of existing labour laws [6][8]. - Earlier this year, the government consolidated 29 labour laws into four comprehensive codes to make the system more efficient and contemporary [6][8]. Group 3: Focus on Worker Rights and Business Facilitation - The codification of labour laws aims to enhance ease of doing business, promote employment generation, and ensure safety, health, social, and wage security for every worker [7][8]. - The role of inspectors will shift to being facilitators rather than obstructers, alleviating concerns about increased compliance burdens [5][8].

Economic Impact of U.S. Tariffs - India's exports to the U.S. have been contracting in certain product categories due to higher U.S. tariffs, indicating a negative impact on trade [1] - The annualized impact of a sustained 50% U.S. tariff could reduce India's growth by approximately 0.5 percentage points [3] Pressure on MSMEs - Labour-intensive sectors, particularly MSMEs, are experiencing pressure on cash flow and profit margins, leading to delays in capital expenditures [2] Government Response and Reforms - The Indian government has implemented countercyclical policy measures, including interest rate cuts and liquidity easing, to mitigate the effects of U.S. tariffs over the next 12 months [3] - Recent tax cuts and labour reform measures aim to support exporters and address potential growth pressures [4] - The government is focusing on improving the ease of doing business and decriminalizing laws to attract more foreign direct investment [5] Market Reforms and Foreign Investment - There are ongoing market reforms, including potential land reforms and increased foreign investment in sectors like atomic energy, insurance, and banking [6] - The overall strategy involves a mix of reforms to boost domestic demand, enhance self-sufficiency in supply chains, and integrate into global value chains [6][7]