India Gig Economy: All you need to know

surajit bhowmick
Aug 17
4 min read

Updated: Sep 2

The India gig economy segment is growing at a 17% compound annual growth rate. It is increasing from 7.7 million workers in 2020-21 to 12 million in 2024-2025. This segment is one of the fastest-growing parts of the country’s workforce. The sector is projected to reach 23.5 million workers by 2029-30 and potentially 61.9 million by 2047. This makes it a critical component of India’s economic transformation.

Understanding the Growth of the Gig Economy in India

Let’s discover the various aspects of the gig economy:

Current Market Size and Growth Trajectory
Key Growth Drivers
Sectoral Distribution and Major Players
Demographics and Worker Profile
Economic Impact and Employment Generation
Key Challenges Facing Gig Workers
Government Initiatives and Policy Development

Current Market Size and Growth Trajectory of India's Gig Economy

From the numbers below, you can see how important the gig economy has become for India and its growth.

The sector's contribution to India’s GDP stands at approximately 1.25%. It is expected to reach 4% by 2030.
The Forum for Progressive Gig Workers projects that the gig economy could ultimately generate 90 million jobs.

Key Growth Drivers

Digital Infrastructure: With over 936 million internet subscribers and 650 million smartphone users, India has created a robust foundation for platform-based work.
Urbanization and Consumer Demand: Increasing demand for convenience services has fueled sector growth.
Economic Necessity: High unemployment rates and limited formal job opportunities have pushed workers toward gig employment.
Platform Innovation: Companies like Zomato, Swiggy, Ola, and Uber have revolutionized service delivery across multiple sectors.

Sectoral Distribution and Major Players

The king sector of the gig economy is e-commerce and delivery services, which dominate 40% of the workforce. Transportation services account for 19%, while food delivery represents 20-30% of hyperlocal gig work.

Engagement of Gig Workforces around the Platform

Transportation: Ola and Uber collectively engage millions of drivers across India.
Food Delivery: Zomato and Swiggy each engage approximately 450,000 delivery partners monthly.
E-commerce: Amazon and Flipkart rely heavily on gig workers for last-mile delivery.
Home Services: Urban Company has emerged as a leading platform for domestic and professional services.

Demographics and Worker Profile

Age Distribution: The data shows that this sector attracts a younger workforce. 40% of gig workers are under 25 years old, with another 39% in the 25 to 35 age group.
Income Profile: 77.6% of gig workers earn less than INR 2.5 lakh annually, while only 2.6% earn between INR 5-7.5 lakh. The average monthly income ranges from INR 15,000-20,000.

If you believe the gig economy is only for male participants, you should check out this data point.

Women constitute approximately 28% of the gig workforce. Many engage in flexible, home-based services through digital platforms. Female participation is particularly notable in sectors like beauty services and customer support.

Contrary to common perception, only 35% of gig workers are in Tier-1 cities. The remaining 65% are distributed across Tier-2 and Tier-3 cities. This indicates the sector's penetration into smaller urban centers.

Economic Impact and Employment Generation

The gig economy has a huge impact on the economy and employment generation. Studies indicate that the sector could serve up to 90 million jobs in India's non-farm economy. This represents approximately 30% of non-agricultural employment opportunities.

As of 2019-20, 47% of gig work involves medium-skilled jobs, 22% high-skilled, and 31% low-skilled positions. The trend shows increasing demand for both high-skilled and low-skilled roles.

Key Challenges Facing Gig Workers

Even though the potential is huge, the road is not easy.

Income Instability and Low Wages: 90% of gig workers lack savings and face high vulnerability during emergencies. Workers frequently experience income volatility due to demand fluctuations and algorithmic control.
Social Security Gaps: Gig workers remain largely excluded from traditional employment benefits. Less than 2% contribute to retirement funds, and only 8% have access to health insurance.
Working Conditions: 78% of delivery workers work over 10 hours daily. 85% work 8+ hours, and 21% work 12+ hours. 83% of cab drivers and 87% of delivery workers report experiencing arbitrary account deactivations.
Legal Ambiguity: The Code on Social Security, 2020, recognizes gig workers but fails to guarantee full labor rights. This includes regulated working hours, minimum wages, and dispute resolution mechanisms.

Government Initiatives and Policy Developments

Let’s check out government initiatives and how the government wants to shape this sector.

Union Budget 2025-26 Provisions:

Registration of platform workers on the e-Shram portal
Issuance of identity cards for gig workers
Healthcare coverage under Ayushman Bharat PM-JAY (Rs 5 lakh per family annually)

Regulatory Framework:

The Code on Social Security, 2020 provides legal recognition for gig workers.
The e-Shram Portal facilitates access to welfare schemes and social security benefits.
State-level initiatives in Rajasthan and Karnataka have introduced specific welfare boards for gig workers.

Regional and State-Level Developments

Several states have pioneered gig worker protection measures:

Rajasthan: The Platform-Based Gig Workers (Registration and Welfare) Act, 2023 mandates welfare cess contributions from aggregators.

Karnataka: The proposed Gig Workers Bill, 2024 aims to establish dedicated welfare boards.

Conclusion

That’s all about the gig economy. I would also like your opinion on how AI can impact this sector.

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