Trade unions, farm outfits oppose trade deals, labour codes

Now I have sufficient grounded facts. Let me compose the UPSC study note.

Trade Unions & Farm Outfits Oppose Trade Deals, Labour Codes

UPSC Prelims + Mains Study Note

1. At a Glance

• A "workers and farmers Parliament" jointly convened by Central Trade Unions (CTUs) and Samyukt Kisan Morcha (SKM) at Jantar Mantar, New Delhi on 9 March 2026 passed resolutions against FTAs with the US, EU, and UK, and against the four Labour Codes. [S6]
• Two distinct but converging fault lines: (a) opposition to FTAs on the ground they expose domestic agriculture and manufacturing to cheaper foreign competition; (b) opposition to four Labour Codes enacted 2019–2020, notified effective 21 November 2025, as allegedly "pro-corporate." [S1][S2]
• This topic sits at the intersection of GS-II (governance, trade policy) and GS-III (labour reforms, agriculture, Indian economy) and tests knowledge of constitutional federalism (GST revenue-sharing), trade law, and labour legislation simultaneously.
• Key bodies involved: Ministry of Labour & Employment (Labour Codes); Ministry of Commerce & Industry (FTAs); Finance Ministry (GST); ILO as international standard-setter. [S3][S4]

2. Why in the News

• 9 March 2026: SKM and CTUs held a joint rally at Jantar Mantar declaring 23 March 2026 (martyrdom day of Bhagat Singh, Rajguru & Sukhdev) as "Anti-Imperialist Day" against FTAs with the US, EU, and UK. [S6]
• 7 February 2026: India delivered a framework for an India-US interim Bilateral Trade Agreement (BTA), triggering parliamentary uproar with Opposition chanting "trade deal wapas lo." [S5]
• January 2026: India and the EU concluded a long-pending Free Trade Agreement after two decades of negotiations — tariff liberalisation on 99.5% of EU imports from India and 97% of Indian imports from the EU. [S4]
• 21 November 2025: Government notified all four Labour Codes as effective; ten major trade unions immediately condemned them as a "deceptive fraud." [S1][S2]
• April 1, 2026 declared a "Black Day" against Labour Code implementation; mahapanchayats announced across all States. [S6]

3. Background & Evolution

Labour Codes — Chronology

• Predecessor framework: 44 separate central labour laws existed pre-reform; codes reduce them to 4, following the 2nd National Commission on Labour (2002) recommendation. [S3]

FTA Background

• India–EU negotiations originally launched 2007, stalled 2013, re-launched 2022; concluded January 2026 after ~2 decades. [S4]
• India–UK FTA signed in 2025 (post-Brexit bilateral).
• India–US BTA framework: 7 February 2026; full agreement still under negotiation. [S5]
• Historical context: India has traditionally been defensive on agriculture in multilateral/bilateral trade talks (WTO Doha breakdown, 2008); farmers fear MSP-protected crops will face import competition.

4. Core Static Facts

Four Labour Codes

• Implementing Ministry: Ministry of Labour & Employment [S1]
• Effective date (Centre's notification): 21 November 2025 [S1][S2]
• Key new provisions:
• Gig & platform workers defined for first time; aggregators to contribute 1–2% of annual turnover (capped at 5% of worker payment) to social security. [S1]
• Fixed-term employees (FTEs): gratuity eligibility after 1 year (vs. 5 years earlier). [S1]
• Women permitted night shifts with written consent + mandatory safety measures (CCTV, transport, double overtime wages). [S1]
• Hire-and-fire threshold raised: establishments with up to 300 workers can retrench without government approval (up from 100). [S3]

GST Revenue-Sharing Demand

• Current: States get ~33% of divisible pool (vertical devolution ratio as per Finance Commission + GST design).
• SKM/CTU demand: raise States' share to 60% of divisible pool; demands amendment of the GST Act to restore taxation powers of States. [S6]

Key Bodies

5. Multi-Dimensional Analysis

Economic - FTAs with the US, EU, and UK could expose Indian agriculture (dairy, poultry, grains) to heavily subsidised imports, depressing domestic prices and threatening minimum support price (MSP) economics. [S5] - Labour Codes aim to boost ease of doing business by simplifying compliance; India ranked 63rd in World Bank Ease of Doing Business 2020 (labour flexibility was a drag). [S1] - Higher retrenchment threshold (300 workers) may reduce job security in organised sector but is expected to attract manufacturing FDI and support Make in India / PLI goals. [S3] - India–EU FTA liberalises 99.5% of EU goods imported from India — significant market access for Indian textiles, gems, pharma, IT services. [S4]

Social - Trade union opposition reflects fears of "race to the bottom" on wages and working conditions, especially for 500+ million unorganised workers. [S2] - Gig/platform worker recognition is a social equity gain but coverage depends on States framing rules — implementation risk. [S1] - Farmer suicides concentrated in MSP-deficit cash crop zones; FTA-driven import surges could worsen agrarian distress. [S5] - SKM represents legacy of 2020–21 farmers' protests (repeal of three Farm Laws); continued mobilisation capacity. [S6]

Geopolitical / Strategic - US–India BTA (Feb 2026) framed in context of Trump-era reciprocal tariffs; India faces 26% US tariff on exports if no deal struck. [S5] - Resolution by CTUs/SKM describing the US as "the biggest enemy of the world's working people" reflects anti-imperialist ideological framing within Indian left-labour movement. [S6] - India–EU FTA has strategic autonomy dimensions: diversifies trade away from China-centric supply chains. [S4] - FTAs contain investment protection, IPR, and labour/environment chapters — disciplining domestic policy space (ILO linkage). [S3]

Legal / Constitutional - Labour is on the Concurrent List (List III, Entry 22–24) of the Seventh Schedule — both Centre and States legislate; States must notify their own rules under the Codes for enforcement. [S3] - As of early 2026, several States have not finalised rules, creating implementation vacuum. [S2] - GST enacted via Constitutional Amendment (101st) 2016; Article 279A establishes GST Council; SKM/CTU demand statutory amendment to revise revenue-sharing formula. [S6] - ILO Core Conventions (Freedom of Association — C87, Collective Bargaining — C98) not ratified by India; Labour Code provisions on strike notice (60-day notice in essential services) draw ILO concern. [S3]

Ethical / Governance - Charge of "pro-corporate" policy: critics argue the 300-worker retrenchment threshold was raised without tripartite consultation (workers, employers, government — ILO's Decent Work framework). [S2] - Transparency deficit: FTA texts with US are not publicly released in full prior to finalisation, drawing Opposition and civil society criticism. [S5] - Federalism: GST revenue-sharing dispute reflects Centre-State fiscal tension; States argue they surrendered VAT/sales tax powers without commensurate revenue compensation. [S6]

Administrative - Four Labour Codes require States to frame subordinate rules before they become operational at the shop-floor level; uneven State-level compliance is the critical bottleneck. [S1][S2] - A single-window compliance portal is envisaged under the Codes to reduce inspector raj, but operationalisation is incomplete. [S1]

6. Recent Developments (last 12–18 months)

• November 2025: Government notified four Labour Codes effective from 21 November 2025; ten major CTUs condemned them as "deceptive fraud." [S1][S2]
• January 2026: India–EU FTA concluded; EU to liberalise 99.5% of Indian goods by value; India to liberalise 97% of EU goods. [S4]
• 7 February 2026: India–US interim BTA framework delivered; Opposition sloganeered in Parliament ("trade deal wapas lo"). [S5]
• February 2026: Farmer bodies announced protests in Delhi demanding halt to US trade concessions and legal guarantee for MSP. [S5]
• March 2026: India–UK FTA in force (signed 2025). [S4]
• 9 March 2026: SKM–CTU joint "workers and farmers Parliament" at Jantar Mantar; resolved 23 March as Anti-Imperialist Day; 1 April as Black Day. [S6]
• Mahapanchayats announced across all States to mobilise against "pro-corporate" policies. [S6]

7. Prelims Hooks

1. The Code on Wages, 2019 was the first of the four Labour Codes to be enacted; it received Presidential assent in August 2019.
2. All four Labour Codes were notified effective by the Central Government on 21 November 2025.
3. The four Labour Codes consolidate 29 central labour laws into 4 comprehensive codes.
4. Gig and platform workers find statutory definition for the first time in the Code on Social Security, 2020.
5. Aggregators are required to contribute 1–2% of annual turnover (capped at 5% of worker payment) to gig/platform worker social security. [S1]
6. Fixed-term employees become eligible for gratuity after 1 year of service under the new codes (earlier threshold: 5 years). [S1]
7. The retrenchment-without-permission threshold has been raised from 100 to 300 workers under the Industrial Relations Code, 2020.
8. Labour is a Concurrent List subject under the Seventh Schedule of the Constitution (Entries 22–24 of List III).
9. The Samyukt Kisan Morcha (SKM) was originally formed during the 2020–21 farmers' protest against three farm laws, which were ultimately repealed in November 2021.
10. The India–EU FTA negotiations were originally launched in 2007, stalled in 2013, and re-launched in 2022; concluded in January 2026. [S4]
11. The India–US BTA framework was delivered on 7 February 2026; India faces 26% reciprocal US tariffs in absence of a deal. [S5]
12. The GST Council is constituted under Article 279A of the Constitution (inserted by the 101st Constitutional Amendment, 2016).
13. SKM and CTUs demand States receive 60% of the divisible pool under GST (current share: ~33%). [S6]
14. 23 March (martyrdom day of Bhagat Singh, Rajguru, Sukhdev) was declared "Anti-Imperialist Day" against FTAs at the 9 March 2026 Jantar Mantar rally. [S6]
15. India has not ratified ILO Convention C87 (Freedom of Association) or C98 (Right to Organise and Collective Bargaining). [S3]

8. Mains Relevance

GS Papers - GS-II: Government policies; statutory bodies; Centre-State relations; federalism; trade agreements and their impact on India's sovereignty. - GS-III: Indian economy — employment, labour reforms, agriculture; effects of liberalisation on industry; government budgeting (GST).

Specific Syllabus Headings - GS-II: "Bilateral, regional, and global groupings involving India" (FTAs with US, EU, UK); "Welfare schemes for vulnerable sections" (Labour Codes); "Devolution of powers and finances to States" (GST sharing). - GS-III: "Indian economy — growth, development and employment"; "Agriculture — food security, MSP"; "Infrastructure — human resources, labour market."

Plausible Mains Questions 1. "The four Labour Codes, 2019–2020 are described both as 'historic simplification' and as 'deceptive fraud' against workers. Critically examine the key provisions and the concerns raised by trade unions." (GS-III) 2. "India's simultaneous pursuit of Free Trade Agreements with the United States, European Union, and United Kingdom poses structural risks to its agrarian economy. Discuss with reference to the MSP regime and WTO disciplines." (GS-III / GS-II) 3. "The demand to restore the taxation powers of States through amendments to the GST Act reflects deeper Centre-State fiscal asymmetry. Analyse in the context of cooperative federalism." (GS-II)

9. Related Topics to Study Next

10. Common Errors / Trap Areas

1. Confusing "29 laws → 4 Codes" with the number of ILO conventions: The consolidation is of 29 central labour laws, not 29 ILO conventions. India has ratified 47 ILO conventions (6 core) — do not conflate.
2. Effective date trap: The four Codes were enacted between 2019–2020 but only notified effective on 21 November 2025. Questions may test whether students confuse enactment year with enforcement year.
3. SKM vs. SKM (Non-Political): After the farm law repeal (2021), the SKM split into SKM and SKM (Non-Political). The joint Jantar Mantar rally (March 2026) involved SKM — do not conflate factions.
4. GST revenue devolution: SKM/CTU claim States get "current 33% of divisible pool." Students often confuse this with the Finance Commission's vertical devolution ratio (currently 41% of net tax revenue under 15th FC) — these are different pools and mechanisms.
5. Labour on Concurrent List ≠ Centre can unilaterally enforce: Since Labour is Concurrent, States must independently frame rules under each Code for it to be operative within their territory. The Centre's November 2025 notification does not automatically enforce the Codes in all States.

11. Sources

• [S1] India's Labour Reforms: Simplification, Security, and Sustainable Growth — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2192524 — (Tier 1: pib.gov.in)
• [S2] Government Makes the Four Labour Codes effective to Simplify and Streamline Labour Laws — https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2192463 — (Tier 1: pib.gov.in)
• [S3] Overview of Labour Law Reforms — https://prsindia.org/billtrack/overview-of-labour-law-reforms — (Tier 1: prsindia.org)
• [S4] India–EU Free Trade Agreement Concluded: A Strategic Breakthrough — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219065 — (Tier 1: pib.gov.in)
• [S5] India's achievements in Free Trade Agreements for the year 2025–26 — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2236134 — (Tier 1: pib.gov.in)
• [S6] Trade unions, farm outfits oppose trade deals, labour codes — The Hindu, 10 March 2026 (article content provided as primary source) — (Tier 4: thehindu.com)

Sources: - India's Labour Reforms: Simplification, Security, and Sustainable Growth - Government Makes the Four Labour Codes Effective - Overview of Labour Law Reforms – PRS India - India–EU Free Trade Agreement Concluded – PIB - India's FTA Achievements 2025–26 – PIB