Cracking the Internship Code in India

Aarthi

Hello everyone, and welcome back to The People Stack! I’m your host, Aarthi, and today I have with me someone who deals with HR complications — our in-house expert, Raj.

Aarthi

Before we start a quick note. This is informational only. For legal questions, speak to a professional.

Aarthi

Raj, ready to make some founders uncomfortable today?

Raj

Always. And today’s topic really needs that discomfort. We’re talking internships, unpaid work, stipends, and the surprising number of companies in India that still think it’s okay to charge interns under names like “paid training,” “industry immersion fee,” or “training-cum-internship.”

Aarthi

Raj, let’s start with the basics. Does India have clear, formal internship laws?

Raj

Short answer? No.Long answer? Still no — but with a lot of footnotes. Internships live in a legal grey zone. Apprenticeships are formal and regulated. Internships aren’t.

Aarthi

So that’s why everyone does whatever they want?

Raj

Exactly. Because there’s no “Internship Act,” employers assume freedom. But regulators look at what actually happens, not your title. If the intern works like an employee — targets, deliverables, holding up your operations — the law can treat them as an employee with wage rights.

Aarthi

So putting “intern” in the letter doesn’t magically protect you?

Raj

Sadly, no. It’s not like writing “diet” on a milkshake.

Aarthi

Founders keep asking this: Are unpaid internships legal in India?

Raj

They’re not banned. But they’re only safe when they’re short, learning-driven, and ideally tied to academics. The keyword is learning, not free labour.

Aarthi

And that's highlighted super clearly — unpaid is okay when the goal is training, not replacing staff.

Raj

Spot on. If your “intern” is carrying half your team's workload, that’s not an internship any more. Courts in India have already warned against using fancy labels just to hide what’s clearly regular employment. They see through “trainee” or “intern” tags if it's just work in disguise.

Aarthi

So, it boils down to documentation and intent. If you’re upfront and keep it genuinely educational, that’s your way out. Otherwise—danger zone?

Raj

Yup. Structure and clarity basically protect you from headaches later. Think of it as insurance for your company’s reputation and compliance.

Aarthi

Okay, here’s the spicy one. Let’s talk about companies charging interns money.Why is this such a big red flag?

Raj

Oof, this is the spicy one, right? Charging interns—honestly, it's a total legal and PR trap. There may not be a single law that says “Don’t do it,” but every rule around labor and consumer protection leans against charging people to work for you.

Aarthi

Labour rules say employers pay employees… not the other way around.

Raj

Exactly. Consumer protection rules treat misleading training fees as an unfair trade practice. And regulators like AICTE have banned companies for this before. There are companies asking for a fee for a so-called “training kit” that was basically just a login for some Google Docs.

Aarthi

That part shocked me. ₹500 to ₹1,000 for software access or a “training kit”?I mean… what is in that kit? Air?

Raj

Exactly. And the Supreme Court even compared unpaid medical internships to “bonded labour.”So imagine if the intern pays to work. That’s negative wages.

Aarthi

And negative wages is one of those phrases that already sounds illegal before you even Google it.

Raj

Exactly. This is where employers underestimate the risk. Fee-to-intern setups can trigger bonded labour implications. And nobody wants that conversation with an inspector.

Aarthi

But not all paid programs are bad, right? Bootcamps, certified courses — they charge fees.

Raj

Totally legitimate. But they’re not internships.Training programs teach. Internships work.Courses charge fees. Internships cannot.

Aarthi

And genuine training programs come with structure — syllabus, trainers, accreditation.

Raj

Exactly. If you want to charge for training, run it as a transparent training program — not a disguised internship.

Aarthi

Let’s scare a few founders — gently. What risks are we talking about?

Raj

Risk number one — consumer complaints. Misrepresent the internship and students can drag you to consumer forums.

Aarthi

Number two — labour law notices. If your “intern” is actually doing employee-level work unpaid, you’re exposed.

Raj

Number three — bonded labour allegations. Fees or unreasonable bonds create legal danger.

Aarthi

Number four — civil lawsuits for promising jobs or placements.

Raj

And finally — reputational damage. One LinkedIn post and your campus hiring pipeline is gone.

Aarthi

Okay, let’s end with solutions. What should employers do to stay safe?

Raj

First — give a clear internship letter. Document scope, duration, training goals, stipend or no stipend.

Aarthi

Second — absolutely no fees, security deposits, onboarding kit charges… nothing.

Raj

Third — pay a stipend when possible. It helps with compliance and goodwill.

Aarthi

Fourth — don’t use interns to run your company. Keep their role learning-focused.

Raj

Fifth — document everything. This is where platforms like O f f r d help — letters, agreements, digital trails.

Aarthi

So basically, if you follow these steps, you avoid 95% of legal and PR disasters.

Raj

Exactly

Aarthi

India’s internship ecosystem is evolving, and regulators are waking up fast. Better to get this right early.

Raj

Most SMEs aren’t trying to exploit interns. They just don’t know the rules. Once you understand them, running a clean, compliant program is easy.

Aarthi

And if you want ready-made internship letters, stipend letters, NDAs, and completion certificates, you can create them instantly on O f f r d dot c o.

Raj

Thanks for listening. Stay compliant, stay fair, and keep internships focused on learning.