A new generation of trade agreements is unlocking preferential access for India’s labour-intensive exports to the UK, the EU and Australia. The race is no longer about market access; it is about scaling manufacturing capacity fast enough to seize it. India is competing with Vietnam, Bangladesh and Indonesia for investment that creates formal jobs at scale and anchors its place in global supply chains. The Government has set a target of lifting manufacturing to 25% of GDP, backed by structural reforms, FDI liberalisation and production-linked incentives.
A gap, however, is visible across every labour-intensive sector India is counting on. Women are just 28% of regular wage workers in apparel and garments, against 70% in China, 75% in Vietnam and 80% in Bangladesh; 21% in textiles against 45-70%; 35% in electronics against 60%; 26% in footwear and leather against 60-75% in these countries. The countries pulling ahead are not simply employing more workers, they are employing far more women, and they have built the housing and support systems that make it possible.
Vietnam’s industrial dormitory ecosystem grew because the State treated worker housing as core infrastructure for its export clusters, drawing private investment with land-use levy exemptions, the right to reserve up to 20% of project area for commercial use, and concessional loans. Bangladesh’s 2017 Economic Zones Workers Welfare Fund, financed by enterprises, makes dormitories an eligible use. In each case, private capital flowed once the rules were predictable and the unit economics worked.
By our estimates, seven million women could join the workforce by 2030 with the right housing—needing at least 3,500 hostels and dormitories in urban areas and industrial clusters. That supply barely exists. A young woman from Bihar or Odisha has no safe, affordable place to live near a factory job. The physical gap between policy ambition and a factory floor she can actually reach, is a structural reason India has struggled to bring women into formal work at scale.
{{/usCountry}}By our estimates, seven million women could join the workforce by 2030 with the right housing—needing at least 3,500 hostels and dormitories in urban areas and industrial clusters. That supply barely exists. A young woman from Bihar or Odisha has no safe, affordable place to live near a factory job. The physical gap between policy ambition and a factory floor she can actually reach, is a structural reason India has struggled to bring women into formal work at scale.
{{/usCountry}}The government has already made key decisions to unlock this supply. The Scheme for Special Assistance to States for Capital Investment (SASCI) 2024-25 earmarks ₹5,000 crore for greenfield working women’s hostels across 28 states; Budget 2025-26 directed ₹2,500 crore to MoHUA for Industrial Housing for Workers. Both carry explicit public-private partnership provisions, and both break cleanly from the Sakhi Niwas model which is a rental scheme that produced just 523 functional hostels in a decade and was never built for industrial scale.
A further ₹10,000 crore for girls’ STEM hostels confirms the shift. The intent is right and now we need to execute well. While states such as Tamil Nadu are already innovating on women’s housing, it will not scale without a Centre-level push. SASCI has put capital support on the table, but as one-time assistance it stops short of guiding states on how to build at scale themselves. The critical next step is to translate political will into central guidelines specific enough to give private capital a reason to move. The guidelines should turn on two things.
- Reform building byelaws to cut cost through better land use: Land is the biggest cost lever, and building norms decide how efficiently it is used. Worker housing is still governed by residential byelaws written for family homes with floor area ratios as low as 1, ground coverage near 30%, and parking mandates designed for car owners. That forces projects to sprawl horizontally and push up land costs. Permitting higher FAR and ground coverage, rationalising parking, and allowing hostels in residential and industrial zones rather than only commercial ones would house far more workers on the same land at lower cost. Because these are state and municipal powers, the Centre should use SASCI to drive them while funding the reforms as an incentive, or making them a precondition for the capital grant so that public money builds where the rules already make hostels viable.
- Back a clear PPP model with viability gap funding: Reforms lower the cost; a well-designed PPP closes the rest of the gap. The MoHUA guidelines for Industrial Housing for Workers, expected soon, should set out application processes and uniform service-level standards that guide how facilities are built, operated and held accountable; and offer Model Concession Agreement templates that states can adapt to local land costs, labour demographics and industry mix without building governance from scratch. Crucially, the model relies on viability gap funding rather than full project financing: Public money covers only the shortfall that makes a site bankable, while private developers invest their own capital. That keeps enough skin in the game to align incentives so hostels are built where the jobs are and managed well over the long 30-year leases SASCI already permits. Guidelines should stay simple enough not to smother such flexibility. The reverse risk is real: Mandates such as adequate parking, food courts and recreation, left undefined, will default to existing bylaws and, for residents who rarely own cars, swallow usable FAR and sink viability.
India’s manufacturing decade will be decided in the smaller choices that determine whether a young woman in Bihar or Odisha believes a factory job can be taken safely. The next ten percentage points of female labour-force participation will not come from policy intent but from physical infrastructure defined by a hostel bed close enough to the factory floor that she can credibly take it.
The schemes are in place, the money allocated, the PPP door open. What remains is making the terms clear, transparent and logical enough for the private sector to walk through it.
(The views expressed are personal)
This article is authored by Pooja Goyal, CEO, The Udaiti Foundation and Piyush Doshi, operating partner, The Convergence Foundation, New Delhi.