Labour laws in India and Pakistan have various similarities, whether governing labour relations, outlawing child labour in specific industries, or mandating equal pay for equal work. However, there are notable differences between the labour laws of the two nations, and these differences significantly impact both nations' labour laws.

Labour laws in India cover all workers, including the informal sector, whereas labour laws in Pakistan only focus on the formal sector of workers. By ignoring the informal sector, Pakistan is making it vulnerable to exploitation, abuse, and dangerous working conditions, as they lack access to legal protection or benefits provided by the labour law, such as minimum wages, social security, etc. They are prone to social tension between the formal and informal sectors, inequality, low productivity, undermining sustainable and inclusive development of the labour force, etc. The informal economy is not covered by labour laws, which has detrimental effects on both the worker and society as a whole.

In India, central and state governments have the authority to enact labour laws particular to the sector and industry. However, Pakistan's central government has primary control over labour laws, and the state only has limited legislative authority. A state's limited ability to enact laws can lead to centralized power, a lack of local accountability and representation, a delay in implementing laws made at the federal level, rigidity and resistance to new laws, and a weakening of democratic values.

In India, many different topics are covered by the labour laws, such as contract work, unions, Social Security, workplace safety, working conditions, termination of employment, etc. However, fewer laws address other issues in Pakistan i.e. Industrial Relations Act, which covers all the issues and is heavily weighted toward industrial relations. Conversely, India has specific laws on specific issues, such as the Trade Union Act and the Industrial Disputes Act. India is able to address the unique social, economic, and environmental challenges connected to that issue thanks to the specific laws on those issues.

The companies operating in both countries face many challenges adhering to the laws of both countries due to these differences in the labour laws in the two nations, forcing them to develop separate policies and practices in accordance with the laws of both nations. In accordance with the laws of both countries, they have to develop separate HR Policies for minimum wages, fringe benefits, and working conditions. These modifications lead to disparities in working conditions, higher wages, and other benefits that can give a country a competitive advantage in a global marketplace. This can increase the cost of doing business for the companies, and foreign investment of the companies in the country.

The trade relations between India and Pakistan may be impacted by Pakistan's and India's different labour laws, as they also affect foreign investment and unfair competition between the nations. For instance, in order to lower labour costs, manufacturing companies are more likely to invest in nations with lax labour laws. Workers may be more likely to migrate to a country where the laws are more stringent in search of better employment opportunities and working conditions.

Both nations' social protection systems are unique from one another. Pakistan only offers 12 weeks of maternity leave, compared to India's 26 weeks. In Pakistan, the maximum number of working hours per day is nine, compared to India's eight. In Pakistan, disputes pertaining to industrial relations are addressed, as opposed to in India, where industrial disputes include all types of disputes, including strikes and lockouts. While social security benefits are primarily provided through the Employees' Old-Age Benefits Institution in Pakistan, the Employees' Provident Funds and Miscellaneous Provisions Act, the Employees' State Insurance Act, and other social security laws provide various benefits to employees in India. In India compared to Pakistan, workers have more access to social protection.

The workers, businesses, society, and economy of the nation are all significantly impacted by the disparity in labour laws between India and Pakistan. Pakistan focuses majorly on industrial relations, whereas India addresses specific issues. Instead of one central law focusing on industrial relations, Pakistan needs to concentrate more on issue-specific laws, and India needs to concentrate on effectively putting existing laws into practice. Therefore, the policymaker must consider these implications when creating and enforcing these labour laws.