From factory floors to delivery corridors: India’s labour crisis

India’s manufacturing sector, often hailed as the engine of economic growth, is facing a paradox. On one hand, the country is witnessing record investments in industrial infrastructure and ambitious government campaigns like Make in India. On the other hand, factories across key industrial clusters are struggling to find workers to keep their machines running.

A striking trend is emerging: the working class, including skilled and educated youth, is increasingly choosing last-mile delivery and gig-economy jobs over physically demanding factory roles. This article explores why India’s workforce is shifting from assembly lines to delivery apps, the impact on manufacturing, and what steps are needed to reverse this trend.

India’s manufacturing sector, a critical pillar of its economic growth strategy, is facing an unprecedented labour crisis. Despite steady investments in infrastructure and industrial capacity, factories are running below optimal productivity due to a shortage of workers. Indian manufacturers across sectors including engineering, automotive, electronics, infrastructure, chemicals, pharmaceuticals and food processing are grappling with a severe shortage of skilled labour, creating significant operational hurdles. A survey conducted by workforce and HR management firm Ultimate Kronos Group, covering over 300 manufacturing companies, revealed that 76% of respondents experienced a skilled labour crunch affecting their profitability in 2023. Of these, 35% described the impact as “severe”, 19% reported only minimal disruption, while 5% said they were unaffected.

Surprisingly, it is not only low-skilled rural labour migrating to cities that is missing from assembly lines, but also educated youth who are opting for last-mile delivery jobs in the gig economy. These roles, often temporary and physically demanding in their own way, are still seen as more accessible, flexible, and dignified than the physically intense, repetitive work in factories.

A closer look at emerging trends reveals that industrial hubs are unable to attract and retain enough workforce, while online delivery jobs are drawing in everyone from students to diploma holders. Reports from Indore and Nagpur showcase this shift vividly.

Educated youth turned delivery agents: Why delivery jobs trump factories?

In July 2025, there have been reports on a growing wave of graduates, diploma holders, and even NEET-qualified aspirants joining delivery platforms in Nagpur. One former NEET student, unable to afford tuition, now works 10–12 hours daily delivering essentials. Another BSc student and mechanical engineering diploma holder share similar stories—driven into gig work by financial strain and pandemic-triggered job losses. Even persons with disabilities find inclusion and support in delivery roles through specialized incentives.

These jobs offer quick entry: basic documents, a rented bike, and a smartphone app. Earnings of ₹400–500 per day, flexible working hours, and no need to commit to a permanent employer make these roles attractive when compared to regimented and strenuous factory work.

In contrast, manufacturing clusters like Indore’s Pithampur, Dewas, and Palda are grappling with severe shortages. Factories have been forced to cut down from two or three shifts to a single shift because of a lack of manpower. Shortages stand at 10–15% for skilled workers, 15–25% for semi-skilled, and 25–35% for unskilled roles.

These shortages are pushing operational costs up by 5–8%, disrupting production schedules, and forcing some units to rely on contractual workers or automation far earlier than planned.

There are clear reasons why last-mile delivery roles are emerging as the preferred option:

1. Ease of entry: Jobs are available instantly with minimal documentation and no lengthy recruitment process.
2. Flexible working hours: Workers can choose when and how much they want to work, accommodating studies or family responsibilities.
3. Less physically taxing perception: Although deliveries require stamina, they lack the repetitive, high-intensity assembly line tasks that factory work often demands.
4. Instant income: Payments are faster and linked to daily or weekly performance, unlike the monthly cycles in industrial work.

The current trend has significant consequences for the manufacturing units:

• Reduced productivity: Factories running below capacity lose output and competitiveness.
• Increased costs: Higher wages and idle equipment reduce margins, impacting global supply chain commitments.
• Investor caution: Uncertainty over labour availability may deter new manufacturing investments in critical sectors like food processing, machinery, and textiles.

Addressing the labour migration

To counteract this shift, manufacturers and local authorities in Madhya Pradesh and beyond are recommending structural changes:

• Development of worker housing and transport infrastructure
• Access to better healthcare, schooling, and social amenities to make industrial areas more livable
• Alignment of Industrial Training Institutes (ITIs) to industry skill needs
• Employer-supported skilling and retention incentives

However, implementation is slow, and the lure of delivery work continues to outpace reforms.

The profile of workers entering gig jobs underscores a societal shift. Many delivery agents are educated and overqualified for the work they do. Yet, they choose it because it offers immediate financial relief, some independence, and fewer barriers to entry compared to formal industrial employment.

What can the industries do to retain the workforce?

The industries can attract workers back into manufacturing through various facilities like:

1. Enhance pay and benefits to compete with gig work.
2. Improve working conditions and provide safety, health, and career growth pathways.
3. Create transition programs to shift delivery gig workers to manufacturing through fast-track training.
4. Modernize industrial hubs with better living standards and worker support systems.

India’s labour challenge is not simply a skills gap but a preference gap. Workers are voting with their feet, choosing flexible gig work over rigid factory jobs. If the manufacturing sector is to fuel India’s economic ambitions, it must urgently rethink how it engages, compensates, and values its workforce. Delivery apps may be solving urban logistics problems, but they are also redefining labour priorities—leaving traditional industries scrambling to fill the void.