Best of the Week: Understanding India's new labour codes

Dear reader,

The Centre has launched a sweeping overhaul of India’s labour laws by merging 29 old regulations into four modern codes. The move aims to bring over 400 million workers under stronger social security, clearer wage rules, and better workplace protections.

The Centre and states are at various stages of rolling out rules. As labour is a concurrent subject, both the Centre and each state and Union territory (UT) will need to notify the rules before a consultation window opens, and only thereafter will the code become operational in the states.

Sectors from tech to textiles have welcomed the reform but expect some short-term adjustments.

The obvious question now is how the new wage definition will affect take-home pay and benefits.

At least half of an employee’s cost-to-company will now be treated as wages, which means gratuity calculations will rise sharply while provident fund contributions stay capped at the existing limit. Gratuity based on the new formula already applies and will boost payouts for anyone exiting after 21 November. Fixed-term employees also become eligible for gratuity after one year. Most people will not see an immediate change in take-home pay, although those earning below the PF ceiling may notice a slight dip.

Curious whether these sweeping labour changes will translate into real jobs and real protection? Dive into Ajit Ranade’s piece for the clarity and context the debate needs.

On to the best of Mint’s work from this week:

LIC’s voting record raises red flags over consistency

LIC’s voting patterns show a striking divergence: while it approved every Reliance Industries proposal and nearly all Adani Group resolutions since April 2022, it frequently rejected similar matters elsewhere. The insurer backed 63 RIL resolutions and 351 of 368 Adani proposals, even supporting qualified financials that it had abstained from previously. Yet, it opposed comparable items at firms such as Titan, Bajaj Finserv, Pidilite, and Coromandel. Experts say the inconsistencies, spanning director reappointments, governance concerns and audit qualifications, undermine LIC’s stewardship code and fiduciary responsibility.

Digital payments stay strong after Diwali

India’s consumption momentum appears to be holding beyond the festive peak, with daily digital spends in November averaging ₹96,017 crore, higher than in October and September. UPI dominates 94% of all digital payments by value, buoyed by rising grocery, electronics, and restaurant spends. Experts say weddings, travel, and year-end purchases should keep demand elevated through January. Some of the surge, however, comes from non-consumption flows: IPO investments, debt repayments and digital gold purchases. Still, economists and industry executives see sustained on-ground spending, helped by GST cuts and deeper UPI adoption across smaller cities.

Bengaluru’s QSR engine sputters as consumers trade up and rents soar

Bengaluru, once a dependable growth market for QSR chains, is losing steam as footfalls weaken, rents surge, and younger consumers flock to gourmet cafés and fast-casual formats. Domino’s, McDonald’s, and Barbeque Nation all flagged slowing or declining sales in the city, even as other metros offset the slump. Analysts say premiumization, cloud-kitchen competition and skyrocketing rents, up over 30% in areas like Indiranagar, are hurting unit economics. Tech workers, battling rising living costs, now spend less on weekday QSR meals and splurge on premium dining instead.

Sebi widens its scrutiny to commodity derivatives

Sebi is turning its spotlight to the commodity derivatives market after cracking down on equity derivatives, asking top brokers to submit three-and-a-half years of client profit-and-loss data for trades in gold, silver, crude oil, and natural gas. The move mirrors Sebi’s concerns in equities, where over 90% of retail traders incurred substantial losses, although losses in commodities are expected to be smaller, given the segment’s significantly lower turnover. With MCX dominating the market and activity still in its early stages, CDS has just 1% of the equities’ client base; brokers worry that curbs similar to those on equity derivatives could stifle a market that is still gaining traction.

Why IPOs remain a minefield for investors

IPOs promise riches but often deliver reality checks. Sellers always know more than buyers, and nowhere is this information gap wider than in new listings. India’s recent startup IPO wave shows this clearly: a few stars like Zomato, Ather, and Groww created massive wealth, but many hyped names like Lenskart, DevX, Firstcry, and Mobikwik have slumped despite sky-high subscription. Heavy retail bidding has repeatedly signalled weak future returns, while strong employee participation has been a far better indicator of quality. Ultimately, valuation and fundamentals and not grey-market frenzy, decide which IPOs soar and which burn early believers. Read this Long Story to understand how to pick new IPOs for your portfolio.

TCS and Wipro hit by fresh US patent lawsuits

TCS and Wipro are facing new US patent infringement suits just weeks apart, adding legal pressure as both battle slowing revenue. Calibrate Networks has accused TCS of misusing its software-rebranding patent, while Mobility Workx claims Wipro violated three telecom and 5G testing patents. The cases reflect rising IP scrutiny as Indian IT firms push deeper into platform, cloud, and AI products, areas where patented technologies abound. With recent billion-dollar disputes involving TCS, Hexaware, and Infosys still unfolding, experts warn that repeated IP challenges could hurt client confidence at a time when the sector already struggles with weak demand.

Reliance JV, L&T to invest in AI data centres in Andhra Pradesh

India’s data-centre boom accelerated on Wednesday as a Reliance Industries joint venture with Brookfield and Digital Realty announced an $11 billion plan to build a 1GW campus in Visakhapatnam, paired with L&T’s $2.5 billion push for five centres totalling at least 300MW. The $13.5 billion surge lifts 2025’s commitments to nearly $60 billion as companies race to serve exploding AI demand. Vizag alone now has over $26 billion pledged, enough to exceed India’s current 1.4GW capacity. Conglomerates are positioning data centres as long-term utilities anchored in renewable power, sovereign AI needs and local storage mandates, making Indian giants the landlords and global cloud players their tenants.

India’s rare-earth pivot deepens as magnet imports slump

India’s permanent magnet imports plunged 56% in April-September FY26 as China’s export curbs and a strategic industry shift away from heavy rare earths reshaped supply chains. Automakers are rapidly adopting light rare-earth magnets and even ferrite alternatives to reduce dependence on China, which still accounts for 88% of imports. Firms like Bajaj Auto, Sona Comstar, Ola Electric, and Ather are redesigning motors, validating rare-earth-free technologies and broadening suppliers after last year’s production shocks. A ₹7,300 crore domestic magnet manufacturing scheme is set to accelerate this transition, though experts caution it will take 2-3 years before India meaningfully reduces reliance on Chinese imports.

India’s private PSLV takes flight

India’s first privately built PSLV is set for a commercial debut this financial year, signalling a major shift in the country’s space ambitions. Three years after Isro outsourced manufacturing, the HAL–L&T venture is ready with the first of five rockets under an ₹860-crore contract. The move mirrors the US model, where agencies set specs and private firms build at scale. A successful launch could draw more startups into the ecosystem, boost supply-chain opportunities, and free Isro to focus on deep-space science. With Oceansat as its inaugural payload, the privatized PSLV could become a key catalyst for India’s next space leap.