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India doesn't have a shortage of manufacturing labour. It has a manufacturing labour expulsion. For three decades, I've worked directly with migrant workers on factory floors, in distribution offices, and in supply chain yards across the breadth. What I'm witnessing now isn't workers abandoning industry for flexible gig work. It's a systematic hollowing out. A calculated decision by Indian manufacturing to automate and reduce labour dependence, accept attrition, and let someone else deal with the workforce. 

The Hidden Scale

India has 200 million labour migrants. People who move specifically for work. That's larger than Brazil's entire population. Mobile VLR data tells us 11.7 million people left Bihar alone in the four years following the pandemic. But they're no longer moving toward factory assembly. They're moving toward delivery apps and dark stores. 

The question isn't why workers are migrating. It's why they're migrating away from manufacturing. The Periodic Labour Force Survey reveals a troubling paradox. Manufacturing's share of employment has remained between 11 and 12% for two decades, even as the sector's GDP contribution grew substantially. India is losing manufacturing jobs before it ever fully industrialised. Gig-economy employment is growing at 12% annually, while manufacturing is growing at 5.5%. 

The Wage Betrayal

The Annual Survey of Industries reveals why. Real wages in manufacturing have grown by just 0.6% annually over two decades. From 2000 to 2022, the share of wages in manufacturing's value added declined from 28% to under 18%. Corporate profits soared while the portion allocated to workers shrank. 

The wage gap is expressed in rupees. Manufacturing pays 14-15,000 per month. Gig work shows 21,000. That's a 7,000 rupee gap. This isn't a labour shortage. It's a wage shortage. 

Manufacturing's Self-Inflicted Wound

Contract workers now represent 42% of organised manufacturing employment, up from 20% in the early 2000s. By replacing permanent workers with contract labour, factories destroyed the stability that made manufacturing attractive. From the worker's perspective, the difference between a six-month factory contract and six months of gig work has narrowed to nothing, except gig work pays better and doesn't require negotiating with a contractor who takes a cut. Manufacturing didn't lose to the gig economy on flexibility. It abandoned its own advantages: Stability, progression, and skill accumulation. 

The Gig Illusion

The 21,000 INR gig earnings collapse under scrutiny. Workers lose 20-30% to fuel, maintenance, and depreciation. A delivery rider's motorcycle depreciates. His body depreciates faster. Add rent—in Mumbai or Bengaluru, 30-40% of income goes to housing. The 21,000 that looked attractive becomes 8,000 of actual surplus. 

The Capacity Paradox

The RBI's capacity utilisation survey reveals the smoking gun. Indian manufacturing operates at 75% capacity while showing stagnant headcount growth. If factories were genuinely struggling with labour shortages, capacity would suffer. Instead, they're running near peak with fewer workers. Manufacturing chose to extract maximum productivity from minimum labour investment. 

Depreciating Human Labour

After five years, a factory worker might earn 25,000 with a path to 40,000. After five years, a delivery rider earns the same 18,000 to 25,000—if his knees hold out. Quick commerce has an average tenure of 38 days. We've traded accumulating human capital for depreciating human labour. 

A Different Proof Point

At a solar park in Rajasthan, an integrated worker infrastructure approach achieved 100 per cent retention. The industry standard is 20-50%. Success came not through higher wages, but through housing, meals, and community. When housing and food are provided, 15,000 becomes 12,000 of actual surplus. When they're not, 21,000 becomes 8,000 of survival. 

The Path Forward

Manufacturing must compete for labour, not complain about its absence. The data shows manufacturing has chosen not to compete. That choice can be unmade.

The cost of living has to fall faster than labour costs rise. Savings decide retention. Retention decides efficiency. Efficiency decides profitability.
 
150 million people leave their homes in India in search of work. They’re not statistics. They’re strategic assets that India is systematically undervaluing.

Indian industry didn’t lose these workers. It pushed them out. And until we’re honest about that, we’ll keep building an economy that grows without developing, that creates jobs without creating futures, and that mistakes activity for progress.

Author Sachin Chhabra is Founder and CEO of Nia.one. 150 million people leave their homes in India in search of work. Nia makes sure they find both.