Apprentices on an Auto-Component Floor: How Many You Must Take, What the Government Pays, What Goes Wrong
How many apprentices must an auto-component plant take, and what does the government pay? As of 20 Oct 2026, a plant with 30+ workers must engage 2.5–15% of its total strength, contract staff included (Apprenticeship Rules r.7B(3), amended 3 Sep 2025). Under NAPS-2 the government pays 25% of the stipend, capped at ₹1,500 a month (PIB, 20 Jul 2026).
Last checked: 20 Oct 2026
By the Mama Editorial Team. This page belongs to the people side of our auto-component pack, next to the guide on selling more machine hours. Every rupee figure is either taken from a gazette or a PIB release, or labelled as an assumption. This is a reading of the published texts, not legal advice.
Key takeaways
- The band counts contract workers. Rule 7B(3) sets 2.5% to 15% "of the total strength of the establishment including contractual staff" (G.S.R. 610(E), 3 Sep 2025). A 600-person plant with 180 contract workers has a floor of 15 apprentices, not 11.
- Stipends rose about 36% in September 2025. The minimum is now ₹6,800 to ₹12,300 a month depending on qualification, with 10% more in year two and a further 15% in year three.
- The government share is smaller than "25%" sounds. NAPS-2 pays 25% of the stipend up to ₹1,500 a month. On a ₹9,600 ITI stipend that is about 16%; the plant pays ₹8,100.
- Apprentices are not production capacity. The Act makes it an offence to put an apprentice on work not connected with training, to pay piece rates or to include them in an output incentive scheme (s.30(2)).
- Night shifts are open to adult apprentices, not under-18s. Rule 12(2), as quoted by DGT, lets apprentices aged 18+ work the establishment's normal hours; under-18s train only 8 am–6 pm unless the Apprenticeship Adviser relaxes it. Overtime always needs the Adviser's approval (s.15(2)).
- Automotive is the largest NAPS sector. It accounts for 9,76,046 of 47,50,432 apprentices in the NAPS sector table covering FY 2021-22 to 30 Jun 2026, per a Lok Sabha reply released by PIB (20 Jul 2026).
The rules in one table
| Item | What the text says | Number | Source, date |
|---|---|---|---|
| Who must engage | Eligible at 4+ workers; obligatory at 30+ | 4 / 30 workers | PIB, 20 Jul 2026; DGT FAQ quoting r.7B(1) |
| How strength is counted | Average strength in the preceding financial year | 1 year average | r.7B(2), DGT FAQ |
| Yearly band | 2.5% to 15% of total strength incl. contractual staff; 5% of the total reserved for fresher and skill-certificate apprentices | 2.5–15 (%) | r.7B(3), G.S.R. 610(E), 3 Sep 2025 |
| Monthly limits | Not below 2% and not above 18% in any month | 2–18 (%) | r.7B(4) as amended 2019, quoted in DGT FAQ |
| Minimum stipend | By qualification, ₹/month | 6,800–12,300 (₹) | r.11(1), G.S.R. 610(E) |
| Government share (NAPS-2) | 25% of stipend, max per apprentice per month, by DBT | 1,500 (₹) | PIB, 20 Jul 2026 |
| Government share (NATS, graduates/technicians) | 50% of minimum stipend, max per month | 4,500 (₹) | PIB, 11 Feb 2026 |
| Penalty for shortfall | Per shortfall of apprenticeship month, first 3 months, then per month | 500, then 1,000 (₹) | Apprentices Act s.30(1A), as amended 2014 |
Step 1: count your total strength the way the rule does
The Apprenticeship (Amendment) Rules, 2025 (G.S.R. 610(E), dated 3 Sep 2025, published 11 Sep 2025) define "contractual staff" as contract labour within the meaning of the Code on Wages, 2019.
Rule 7B(3), as substituted by that notification, requires each establishment to engage apprentices "in a band of 2.5 per cent. to 15 per cent. of the total strength of the establishment including contractual staff" within a financial year.
The DGT's published FAQ on the Apprentices Act quotes rule 7B(2): strength is the average strength in the preceding financial year.
For an auto-component plant this matters because press shops, paint lines and assembly often run a large contract share. A plant that counts only its 420 payroll workers will set its band too low.
The same FAQ quotes rule 7B(4): in no month should apprentices be under 2% or over 18% of total strength, provided the 2.5% yearly obligation is met in apprentice-months.
Step 2: price the stipend honestly
The 2025 amendment replaced the stipend table in rule 11(1). Minimum monthly stipends, in force since publication on 11 Sep 2025:
| Category | Minimum stipend (₹/month) | NAPS-2 government share (₹/month) | Plant pays (₹/month) | Government share (%) |
|---|---|---|---|---|
| School pass-out, class 5–9 | 6,800 | 1,500 | 5,300 | 22 |
| School pass-out, class 10 | 8,200 | 1,500 | 6,700 | 18 |
| Class 12, or National/State (ITI) certificate holder | 9,600 | 1,500 | 8,100 | 16 |
| Diploma holder (technician) | 10,900 | 1,500 under NAPS-2 | 9,400 | 14 |
| Graduate or degree apprentice | 12,300 | 1,500 under NAPS-2 | 10,800 | 12 |
Because 25% of every new stipend is above ₹1,500, the cap always binds: the government pays a flat ₹1,500, not a quarter. This is our arithmetic on the gazette table and the PIB release of 20 Jul 2026.
Graduates and diploma holders can instead come through NATS, run by the Ministry of Education, where the government share is 50% of the minimum stipend up to ₹4,500 a month, per PIB (11 Feb 2026). That release describes NATS as approved for continuation up to 2025-26.
Stipends step up during training. In the second year the minimum rises by 10%, and in the third by a further 15%, per the enclosure to the 2025 model contract.
Three conditions in the 2025 text shift money back to the plant. The government share is paid only if the establishment meets the scheme conditions; otherwise "the Establishment is liable to pay the monthly stipend amount in full." The central share covers first-time training only (new rule 7D(4)). And the stipend for a month is due by the tenth of the next month, with no deduction for casual or medical leave.
Worked example: a 600-person press-and-machining plant
Assume a plant in an auto belt with an average 600 people in FY 2025-26: 420 on payroll and 180 contract workers. Assume it takes 30 apprentices in their first year: 20 ITI certificate holders and 10 class-10 freshers, all eligible for NAPS-2.
| Line | Basis | ₹ per month | ₹ per year |
|---|---|---|---|
| Band | 2.5% and 15% of 600 | 15 to 90 apprentices | — |
| Stipend, 20 ITI | 20 × ₹9,600 | 1,92,000 | 23,04,000 |
| Stipend, 10 class-10 | 10 × ₹8,200 | 82,000 | 9,84,000 |
| Less NAPS-2 share | 30 × ₹1,500, paid to the apprentice by DBT | −45,000 | −5,40,000 |
| Plant's stipend cost | 2,29,000 | 27,48,000 | |
| Trainer time (assumption) | 3 setters at an assumed ₹40,000, half their time | 60,000 | 7,20,000 |
| Total plant cost (assumption) | 2,89,000 | 34,68,000 |
Per apprentice, the assumed all-in cost is about ₹9,600 a month. A contract machine operator at an assumed ₹18,000 a month all-in looks nearly twice as expensive. That comparison is exactly the trap.
Two more facts change the picture for this plant. Section 9(3) of the Apprentices Act, 1961 requires apprentices without institutional training (our 10 freshers) to finish basic training before entering the workshop. Section 9(4) says an employer with 500 or more workers must give basic training in a separate part of the workshop or a separate building.
The value side is a hiring pipeline, not cheap hours. The AJNIFM third-party evaluation cited by PIB on 11 Mar 2026 reports that about 72% of apprentices surveyed received full-time job offers after completing training. Section 22 of the Act leaves recruitment policy to the employer; there is no obligation to hire.
What goes wrong on an auto-component floor
The apprentice becomes an operator. Section 30(2) of the Act makes it an offence to employ an apprentice "on any work which is not connected with his training", to pay on a piece-work basis, or to require participation in an output bonus or incentive scheme. The fine is ₹1,000 for every occurrence.
The night shift and overtime. Section 15(1) lets the employer set an apprentice's weekly and daily hours, subject to the prescribed training duration. Rule 12(2), as quoted in the DGT FAQ, allows apprentices aged 18 and above to work the establishment's normal hours, including night shifts; apprentices under 18 train only between 8.00 am and 6.00 pm unless the Apprenticeship Adviser approves a relaxation case by case. Separately, the 2025 amendment to Schedule V sets the same 8.00 am–6.00 pm window for basic or practical training given in online, virtual or blended mode. Section 15(2) bars overtime without the Adviser's approval, and s.30(2)(c) makes requiring it an offence.
Nobody is in charge of training. Section 11(b) requires a person with the prescribed qualifications to be placed in charge of training if the employer is not qualified, and s.11(bb) requires adequate instructional staff.
The "trainee" is outside the Act. The Code on Wages, 2019 (s.2(k)) and the OSH Code, 2020 (s.2(1)(t)) exclude from "employee" only "an apprentice engaged under the Apprentices Act, 1961". A trainee on an unregistered in-house scheme is not covered by that exclusion. Rule 14(1) requires each contract of apprenticeship to be registered on the portal.
Injury. Section 16 makes the employer liable for compensation if an apprentice is injured by accident in the course of training. Section 14 applies the health, safety and welfare chapters of the Factories Act, 1948 to apprentices as if they were workers; the OSH Code repealed that Act from 21 Nov 2025 (s.143), and the Act's text as amended to 2014 still refers to it. Our risk overview for auto suppliers covers what a press injury costs.
Penalties are small; that is not the point. Section 30(1A) sets ₹500 per shortfall of apprenticeship month for three months, then ₹1,000 a month. PIB (11 Feb 2026) says the Jan Vishwas 2.0 Bill, then before a Select Committee, proposes moving the Act towards civil penalties.
How this fits the rest of your headcount
Apprentices sit beside contract labour and fixed-term hires in the same headcount, and only the contract workers raise the apprentice band. For the contract side, see contract labour headcount and the contract labour cost calculator. For shifts, overtime and fixed-term employment under the new Codes, see Labour Codes for a 200–1000 worker plant.
What cameras can and cannot tell you here
Cameras can show, in aggregate, how many people stood at a training cell or machine, whether a machine ran with one person or two, and whether a press marked for training ran outside the hours set for training.
Cameras cannot tell who is an apprentice, whether a trainer is qualified, whether training follows the approved syllabus, whether stipends reached bank accounts or whether a contract is registered. Those answers sit in the portal, payroll and training records.
If cameras are used on a floor with apprentices, the worker notice under DPDP applies to them as well; see the worker CCTV notice template.
Where Mama fits
Mama reads the cameras a plant already has over RTSP/ONVIF, or a few added ones, and every morning sends the owner a short plain-language note on where machine hours went yesterday. For a plant with a training cell, that means seeing whether training machines ran, stood or ran outside the hours set for training, counted at machine level and in aggregate, with no names and no ranking of operators or apprentices. Leave an email or phone in the form below.
FAQ
Do contract workers count towards the 2.5–15% apprentice band?
Yes. Rule 7B(3), as substituted on 3 Sep 2025 by G.S.R. 610(E), says the band is calculated on "the total strength of the establishment including contractual staff".
How much does the government pay for each apprentice under NAPS-2?
25% of the stipend, up to ₹1,500 per apprentice per month, paid directly to the apprentice's bank account by DBT, per PIB (20 Jul 2026). With the September 2025 stipends, the cap always applies, so the share is a flat ₹1,500.
What is the minimum stipend for an ITI apprentice in 2026?
₹9,600 a month for a National or State Certificate holder, per rule 11(1) as amended by G.S.R. 610(E) (3 Sep 2025). It rises by 10% in the second year and a further 15% in the third.
Can apprentices work the night shift in an auto-component plant?
Adults, yes. Rule 12(2), as quoted in the DGT FAQ, lets apprentices aged 18 and above work the establishment's normal hours, including night shifts. Under-18s train only 8 am–6 pm unless the Apprenticeship Adviser approves a relaxation, and overtime for any apprentice needs the Adviser's approval under s.15(2).
Do I have to hire apprentices after training?
No. Section 22 of the Apprentices Act lets each employer set its own recruitment policy, and PIB (20 Jul 2026) states it is not obligatory to hire. A contract that includes a service condition is the exception: then the employer must offer suitable employment.