Haryana has announced a sharp 35% increase in minimum wages following a week of labour unrest and factory disruptions in its key industrial belt. The state government said on Friday that the monthly minimum wage for unskilled workers will be raised to Rs 11,274.60 to Rs 15,220, with effect from April 1.
The move comes as workers across industrial hubs struggled with rising living costs, particularly food prices, amid supply disruptions linked to the ongoing US-Israel-Iran tensions.
The decision is expected to escalate the cost pressure on Indian automobile majors, as Haryana is a key manufacturing hub for vehicles.
The wage hike also follows clashes between police and workers in Haryana's Manesar, a major manufacturing cluster near New Delhi that hosts companies such as Maruti Suzuki and several ancillary units.
Officials urged workers to resume duties peacefully after the announcement.
While the wage hike is expected to provide relief to labourers, it is likely to increase cost pressures on the auto industry, which is already grappling with elevated raw material prices and supply chain disruptions.
Automakers including Tata Motors and Mahindra & Mahindra have already raised vehicle prices, and Maruti Suzuki has indicated it may follow suit.
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Workers who demanded the wage hike said the recent spike in food prices has been severe, with some reporting that basic meals have nearly doubled in cost due to disruptions in gas supply.
India, one of the world's largest importers of liquefied petroleum gas (LPG), is facing a significant supply crunch, prompting the government to prioritise household consumption over industrial use.
The crisis has also triggered reverse migration, with several workers returning to their native villages.
Industry representatives warn that labour shortages could further disrupt production if the trend continues.
Companies in the Manesar belt reported operational disruptions during the protests. Suppliers such as Munjal Showa and Roop Polymers were among those affected, with reduced output and workforce absenteeism.
According to industry body India SME Forum, many employers are trying to retain workers by offering incentives such as meals and small bonuses.
The forum has urged the government to introduce emergency support measures, including common kitchen facilities for industrial clusters.
Although recent diplomatic engagement between Iran and the United States has raised hopes of easing tensions, industry executives caution that supply chains may take weeks to normalise.
Meanwhile, India's vast migrant workforce—estimated at around 400 million—remains particularly vulnerable to such economic shocks.
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