By Vikrant Rana and Shantam Sharma
Unemployment in India remains stubborn. The government’s PLFS survey placed it at 5.6%[1] in June 2025, while independent estimates such as CMIE suggest a higher 7%. This mismatch between rising educational qualifications and limited employability is where the Apprentices Act, 1961 (“Act”) plays a critical role. The Act seeks to bridge this gap by mandating structured, on-the-job training through apprenticeships, ensuring that students and young workers gain industry-ready skills.
Earlier certain industries were explicitly included, while others were left guessing whether they had obligations under the law. This grey area ended on 3 September 2025, when the Ministry of Skill Development and Entrepreneurship (MSDE) issued Notification S.O. 4072(E).[2]
The notification replaces the old 1999 schedule of industries and lines up the Act’s applicability with the National Industrial Classification (NIC), 2008. In plain terms, it pulls almost every part of the economy into the apprenticeship framework.
Which Sectors Are Now Covered?
Earlier, the Act largely spoke to manufacturing and traditional trades. With this notification, the Government has gone wide, formally naming agriculture, mining, IT, retail, hospitality, healthcare, financial services, and even households as covered industries.
| Sector | Examples of Coverage |
| Agriculture & Forestry | Farming, dairy, fisheries, logging |
| Mining & Quarrying | Coal, oil and gas, stone, sand |
| Manufacturing | Textiles, automobiles, pharma, electronics |
| Utilities & Construction | Power plants, water supply, roads, pipelines |
| Wholesale & Retail | Dealerships, supermarkets, e-commerce |
| Services | IT, telecom, banking, insurance, healthcare, education, hospitality |
| Public & Social Services | Defence, policing, museums, sports bodies |
| Household & Extraterritorial | Domestic staff, embassies, international bodies |
Who Qualifies as an Apprentice?
The fundamental criteria remain unchanged. Section 3 of the Act lays down eligibility, while Sections 3A and 3B deal with reservation for SC, ST and OBC candidates.
| Requirement | Details |
| Age | Minimum 14 years; 18 years if the trade involves hazardous work |
| Education | Varies by trade, could be school-level for basic trades or graduate/technical qualifications for higher categories |
| Fitness | A medical fitness certificate is needed before starting |
| Reservation | Training seats must reflect SC, ST, and OBC population ratios |
Employer Obligations
The principal eligibility criteria for establishments to engage apprentices is provided in Section 8(1).
- Establishments in designated industries employing 30 or more workers (excluding apprentices) are required to engage apprentices.
- Establishments with fewer than 30 workers may also engage apprentices, though such engagement is voluntary.
Once this threshold is met, Section 8(3) requires that between 2.5% and 15% of the total workforce (including contract labour) must consist of apprentices.
Beyond the threshold test, the Act prescribes substantive obligations on establishments:
| Employer Obligation | Details |
| Engage Apprentices | Between 2.5% and 15% of workforce strength must be apprentices |
| Apprenticeship Contract | Must be executed and registered on the National Apprenticeship Portal |
| Training | Provide practical training, classroom instruction, and qualified trainers |
| Stipend[3] | Pay at least the notified minimum (not linked to output or bonus) |
| Safety & Welfare | Ensure workplace safety and welfare under relevant labour laws |
Apprenticeship Period
The law does not treat all apprenticeships the same. Depending on the type of apprentice, the training period differs:
| Category | Training Duration |
| Trade Apprentices | As prescribed for each trade; depends on prior training |
| Graduate/Technician Apprentices | As per Central Government notification |
| Optional Trade Apprentices | Duration fixed by employer under the Rules |
The key point: every apprenticeship must be backed by a written contract. Without one, the training relationship is not legally valid.
Compliance and Penalties
To ensure compliance, the Act prescribes reporting, inspections, and penalties. Employers must maintain training records, file returns, and register contracts online (Sec. 19).
Failure to engage the mandated number of apprentices attracts penalties:
- First 3 months of shortfall: ₹500 per month per missing apprentice seat.
- Beyond 3 months: ₹1,000 per month per seat until filled (Sec. 30).
Conclusion
The September 2025 notification has turned the Apprentices Act into a near-universal framework. The notification opens the door for students who earlier had no structured pathway into industries like hospitality, telecom, or banking.
For employers, it translates to increased compliance. IT service providers, hospitals, retail chains, and even NGOs need to keep into consideration and design apprenticeship programs, budget stipends, and file returns.
[2] https://www.dgt.gov.in/en/node/3788
[3] https://incometaxindia.gov.in/Acts/Apprentices%20Act,%201961/102120000000000125.htm