India's digital landscape is rapidly evolving, driven by a confluence of factors including robust internet penetration, growing smartphone adoption and a burgeoning young population. At the heart of this transformation are two interconnected forces- ecommerce and the gig economy flourished simultaneously.
A Niti Aayog report reveals that ecommerce alone has generated over 5 million gig jobs, predominantly in delivery, with growing prospects in customer service and content moderation. Online marketplaces require a large workforce for order fulfillment, delivery, and customer support, creating diverse job opportunities.
This gig economy allows entry-level workers to gain experience, build professional networks, and achieve economic empowerment. With the gig economy contributing 1.2 per cent to India's GDP, as noted by a BCG report, ecommerce companies have become increasingly dependent on this flexible labour force to manage order fulfilment, customer support and logistics efficiently.
Speaking at a virtual roundtable hosted by the Policy Consensus Centre (PCC), experts noted that this boom in ecommerce has not only spurred significant job creation, particularly in urban and semi-urban areas but also provided roles for individuals with diverse skill levels and limited qualifications. However, Is this rise really reshaping the job market with a range of flexible work opportunities?
Amar Patnaik, Former Member of Parliament, Biju Janata Dal (BJD) said, “India's gig economy is a significant contributor to job creation, offering supplementary income opportunities, as seen with delivery roles in ecommerce. While these jobs provide essential income, the sector remains partially informal, lacking comprehensive social benefits and formal contracts. The introduction of new labour codes and the collection of data by platforms presents an opportunity for greater formalisation."
Patnaik added that legislative reforms must establish clear definitions and rights for gig workers. Robust regulation and support, including comprehensive social security measures, are crucial for evolving this sector into a more organised and inclusive workforce. Implementing comprehensive measures such as health insurance deductions can improve their security and welfare. Both the government and platforms need to work together in formalising the sector, ensuring better working conditions, and continuing to foster employment opportunities.
Arpita Mukherjee, Professor, ICRIER, said, “The gig economy encompasses a variety of employment models, from permanent to contractual, offering unique self-employment opportunities. However, tracking contributions and standardising data remains challenging. A systematic approach is needed, utilising common identifiers like Aadhaar, to accurately capture the economic impact and ensure fair work conditions."
Mukherjee added that the collaborative efforts between platforms, the government, and training providers can enhance skill development and address the diverse needs of this evolving workforce. The complexity of these dynamics highlights the importance of structured data collection and tailored training programs to support sustainable employment growth.”
India's Unemployment Crisis
There is no need for concern about job losses, said Union Labour Minister Mansukh Mandaviya on Monday and predicted that India's unemployment rate would fall below 3 per cent in the near future. In a dramatic development, recently, a stampede-like situation occurred in the Bharuch district of Gujarat where over 800 applicants showed up for a walk-in interview for 40 vacancies. This desperate clamour for a job highlights the severity of the unemployment crisis, especially among the youth in India, even though the Union government is loath to acknowledge the problem.
Mumbai's Kalina area also witnessed a massive influx of job seekers as thousands flocked to attend walk-in interviews for a mere 600 vacancies at Air India Airport Services. The overwhelming turnout for maintenance staff positions quickly spiralled out of control, prompting officials to ask applicants to simply submit their resumes and leave the premises. A video capturing the chaotic scene went viral on social media, showcasing the enormous crowd that had gathered. The sheer number of aspirants caused a significant traffic jam in the area, highlighting the desperation and competition for limited job openings."
The International Labour Organisation (ILO) in its recent report stated that the unemployment rate of Indian youths is higher than for adults. The youth unemployment rate has been rising over the past several decades– from 5.6 per cent in 2000 to 6.2 per cent in 2012 and then increasing threefold, to nearly 18 per cent in 2018 and reaching around 15.1 per cent in 2020
After expressing its concerns about a report of the ILO, the Modi government has questioned a Citigroup report, which revealed that India “will struggle to create sufficient employment opportunities” even with a seven per cent economic growth rate. The Union Ministry of Labour and Employment said that the report fails to consider the positive trends and comprehensive data from official sources, such as the Periodic Labour Force Survey, the Reserve Bank of India and the Employees Provident Fund Organization, which show consistent improvements in key labour market indicators.
Earlier, an ILO report had revealed that the youth unemployment rate has been rising over the past several decades and noted that unemployment among educated youth was particularly high and had exceeded global averages by 2018 to create more jobs by investing in infrastructure development, promoting entrepreneurship and by providing skill development programmes. The issue of jobless growth can be resolved by incentivising businesses to hire more employees and promoting labour-intensive industries, experts noted.
Turning back to India's gig economy, a study highlighted that it has the potential to serve up to 90 million jobs in non-farm sectors, adding around 1.25 per cent to India’s gross domestic product (GDP). Platforms like Uber, Ola, Swiggy, and Zomato are notable contributors to this trend, providing vast opportunities for gig workers across the country. The Covid-19 pandemic further accelerated this shift, as both workers and companies sought more flexible work arrangements.
Globally, the gig economy has seen exponential growth over the past decade. According to a report, the gig economy is projected to grow by 17 per cent annually, reaching a staggering USD 455 billion by 2023. This surge is fueled by technological advancements, changing work preferences, and the increasing demand for flexible work arrangements.
Shriram Subramanian, Founder MD, InGovern Research Services said, “India's gig economy is a major driver of job creation, with companies like Amazon India adding over 100,000 seasonal jobs during the 2023 festive season. This sector offers workers flexibility and the ability to set their schedules, often making them self-employed. However, their work with platform companies creates a complex dynamic, especially as more workers engage with multiple platforms.”
Subramanian further added that this situation poses challenges for registration and access to social security benefits. Companies like Amazon, eBay and other ecommerce companies play a crucial role in supporting government initiatives such as E-shram (Pradhan Mantri Suraksha Bima Yojana) and Health ID (Pradhan Mantri Jan Aarogya Yojana).
A report by TeamLease Edtech revealed that 78.57 per cent of employers find gig workers meeting or surpassing job expectations, however, 20.24 per cent of employers highlighted the need for improvement. About 75.90 per cent of the respondents identify technical skills as the most essential element for gig workers underscoring the growing reliance on technology across industries. Notably, communication skills play a major role as 68.67 per cent of respondents highlight its importance in meeting client expectations and remote collaborations.
The survey sheds light on the most common skill gaps observed in new gig workers. While many gig workers possess strong technical skills, 42.86 per cent of respondents point to a lack of industry-specific knowledge as the primary deficit. This finding suggests that gig workers often lack the specialised knowledge required for particular industries, which can impact their effectiveness and efficiency in delivering quality work.
Soft skills are the second most common gap, highlighted by 28.57 per cent of respondents. This includes abilities such as communication, teamwork, and problem-solving. These skills are crucial for gig workers who frequently interact with various clients and must manage multiple projects simultaneously.
Sushma Morthania, Director General (DG), India SME Forum said, “Platforms like Amazon, Zomato, and Ebay have shown the importance of building consumer confidence, which can be mirrored in supporting gig workers with essential benefits such as medical, life insurance, and equal pay. Additionally, skill development and safety measures are vital, as I’ve seen firsthand the ambition and desire for growth among gig workers in facilities like Amazon’s warehouses.”
