With the Uttar Pradesh and Haryana governments announcing interim hikes in minimum wages amid labour unrest in the NCR, industry estimates suggest the revisions could push wage bills up by nearly 30-35%. The UP government has raised minimum wages by 21%, while Haryana has announced a 35% increase.
“Our wage bill is likely to go up by at least 30% because the increase announced by the UP government is only for minimum wages. The overall cost to company will rise by almost 30%. It is a very tough time for industries, especially small and micro enterprises,” said Jitendra Rana, chairman of the Indian Industries Association, a UP-based MSME body.
The protests, which began in Manesar, Haryana, last week and have since spread to Gautam Buddha Nagar in UP, threaten to disrupt operations across key industrial hubs in the NCR — Noida, Greater Noida, Faridabad, Manesar, Gurugram and Ghaziabad. The region houses several large manufacturing units across electronics, automobiles and textiles.
A spokesperson for a large electronics manufacturer said the wage issue is largely confined to smaller units where salaries are relatively low. Large corporations, particularly MNCs, typically adhere to global wage standards, limiting the impact.
Some industries noted that labour accounts for a relatively small share of total production costs, which may cushion the overall impact. However, Noida-based exporters cautioned that rising wage costs, coupled with higher input prices due to the West Asia crisis, could weigh on margins.
A textile exporter in Noida said labour accounts for less than a fifth of total production costs and that higher wages can be passed on through pricing. “Labour cost is less than 20% of overall production cost. Production costs have already risen due to the West Asia crisis, and many customers are aware and willing to pay higher prices. We can absorb higher wages as long as revisions are uniform across states,” the exporter said.
“This calls for a coordinated response — stabilising energy and input costs, ensuring availability of essential supplies for workers, and supporting MSMEs with working capital and flexibility in labour compliances, so that enterprises can retain their workforce and maintain operations,” said Vinod Kumar Wuthoo, president, India SME Forum.
Under UP’s revised structure, monthly wages for unskilled workers have increased to Rs 13,690 from Rs 11,313, for semi-skilled workers to Rs 15,059 from Rs 12,445, and for skilled workers to Rs 16,868 from Rs 13,940. In Haryana, wages for unskilled workers have risen from Rs 11,274 to Rs 15,220, while semi-skilled wages have increased from Rs 12,430 to Rs 16,781.
Large corporations, meanwhile, said they will continue to prioritise employee well-being to ensure operational stability. Dixon Technologies, which operates 16 units in Noida, said it is focusing on employee safety, with authorities coordinating closely with industries to restore normalcy.
The Motherson Group said the unrest in Noida stems from misinformation around wage revisions and has not affected its operations, adding that worker safety remains a priority. SIAM president Shailesh Chandra flagged rising input costs, warning that labour issues may add marginal pressure amid broader commodity-driven inflation. Nasscom also emphasised that employee safety and well-being remain non-negotiable.