Formal workforce grows, but labour-intensive sectors lose EPFO share
EPFO-covered employment rose 8.97% to 7.95 crore between 2023-24 and 2025-26, while 12 labour-intensive industries lost 72,076 contributors. The trend could tighten talent availability across apparel, textiles, leather and food-processing supply chains.
What happened
Employees' Provident Fund Organisation (EPFO) · India’s formal workforce expanded, but labour-intensive sectors including garments, textiles, leather, gems and
Key facts
- EPFO contributors in 12 labour-intensive industries fell 1.3% to 54.64 lakh in 2025-26 from 55.36 lakh in 2023-24
- Their EPFO share fell to 6.87% from 7.58%
- Overall EPFO-covered workforce rose 8.97% to 7.95 crore from 7.30 crore
- Broader labour-intensive basket share fell to 15.14% from 16.04%
- Services added 42.32 lakh contributors, about 65% of total net EPFO growth
Why this matters
Corporate-development teams should prioritize acquisitions, partnerships or supplier investments that add automation, workforce retention capabilities and diversified sourcing in vulnerable labour-intensive categories.
What to watch
- Monthly EPFO net additions and the labour-intensive sectors' share of contributors.
- Factory-level attrition, absenteeism, overtime usage and vacancy-fill times.
- Apparel, textile, leather and food-processing wage revisions in key sourcing states.
- Supplier delivery delays, order rejections, capacity-utilisation rates and requests for price increases.
- Government manufacturing incentives, labour-code implementation and skilling or apprenticeship policy changes.
- Export-order trends and festive-season production demand.
- Secure capacity and labour-retention plans with strategic apparel, textile, leather and food-processing vendors.
- Add wage, overtime, absenteeism and lead-time escalation clauses to supplier scorecards and sourcing contracts.
- Diversify sourcing across regions and qualify backup vendors before peak-season order placement.
- Prioritise assortment, packaging and process redesigns that reduce labour content without compromising quality.
- Model margin exposure by category under 5-10% supplier wage inflation and extended production lead times.