Founders ask this question for a simple reason: cash is tight and a student wants experience, so why not an unpaid arrangement? The honest answer has two parts. The legal position is less clear-cut than many people assume, and the business case for paying is stronger than most expect. This post is general information, not legal advice; for your specific situation, check the current rules and speak to a qualified professional.
The short answer
To the best of general understanding, India does not have a single central law that fixes a minimum stipend for interns at private companies, in the way that apprenticeship law does for apprentices. That does not mean anything goes. Whether you must pay depends on what the arrangement really is, and the label "internship" on a letter does not decide that on its own.
Internship, apprenticeship and employment are different things
It helps to separate three arrangements that people often mix up.
| Arrangement | What it generally means | Pay position (general) |
|---|---|---|
| Apprenticeship | Structured training under the Apprentices Act, 1961 and its rules, with registration and a prescribed framework | A stipend is required under that framework; check the current prescribed rates |
| Internship (learning-focused) | Short, time-bound learning placement, often linked to a student's course, with supervision and a learning plan | No single central minimum; stipend depends on policy and practice |
| Employment | Fixed hours, productive work, directed by the employer, no real learning component | Labour and wage laws can apply, whatever the letter calls it |
If you want the apprenticeship route, which comes with its own obligations and benefits, read apprentice vs intern vs trainee before deciding.
When an "internship" starts to look like a job
The risk area is an unpaid or token-paid arrangement that is, in substance, employment. Warning signs include:
- The intern does the same work as a paid employee, with the same targets.
- Fixed full-time hours and attendance rules, but no training plan or mentor.
- The arrangement runs for many months or is renewed repeatedly.
- The person is not a student or recent graduate and the "internship" is really a probation period.
- Your business would need to hire someone if the intern left.
If several of these apply, labour and minimum-wage rules (which vary by state and by type of work) may be relevant. That is exactly the point to take advice rather than rely on the word "intern".
The practical fix is to make the learning component real and visible. Write down what the intern will learn, name a mentor, set a fixed end date and hold a review at the end. Our guide to building an internship programme and the 30-day onboarding plan template give you that structure. Put the terms in a clear offer letter so both sides know what the arrangement is. If what you really need is ongoing productive capacity, be honest with yourself and hire a paid fresher or a paid part-time intern instead.
College and regulator rules
Many students do internships as a credit requirement of their course. Universities and bodies such as AICTE and UGC have their own internship guidelines for students, which may cover duration, supervision, evaluation and certificates. These mainly govern what the college expects and will accept, rather than setting a private employer's pay. If a student needs a college form signed, read it carefully: you may be asked to confirm hours, a mentor, and an evaluation at the end. Professional courses (for example chartered accountancy articleship) have their own regulator-set stipend rules, so check with the relevant institute if you hire in those tracks.
The business case for paying a stipend
Even where you are not strictly required to pay, a fair stipend is usually the better commercial choice:
- A bigger, better applicant pool. Many capable students simply cannot afford to work unpaid, especially those who would need to travel or relocate.
- Commitment. Paid interns are more likely to show up, finish the internship and treat deadlines seriously.
- Fair expectations. Once you pay, it is reasonable to ask for real output, which is what you wanted in the first place.
- Brand. Students talk. Unpaid roles that turn out to be full-time work get discussed in college groups, and that follows you into every future campus hiring season.
- Conversion. A paid intern who performs well is an easy hire; the intern-to-full-time ROI calculator and our analysis of the ROI of hiring interns show why.
How to set a sensible stipend
Start with the value of the work and the local cost of living, not with the lowest number students will accept. The internship stipend calculator gives an indicative figure by role and city, and our post on stipend benchmarks by role lists indicative ranges. Whatever you choose, write it down in a short stipend policy so every intern at the same level is treated alike, and state the amount and payment date in the offer letter. Also think about travel or data allowances for field and remote roles. Small firms working to a tight budget often find that one well-paid intern delivers more than two token-paid ones; our SME hiring and startup hiring pages cover budget-friendly ways to structure this.
What about genuinely unpaid internships?
There are narrow cases where an unpaid placement can be reasonable: a very short, observation-heavy placement for a student who needs course credit, with a real learning plan and no productive output you depend on. If you go that way, keep it short, put the learning plan in writing, assign a mentor, cap the hours, and do not use the intern to replace paid staff. Even then, consider covering travel or meals.
How this works on MyInternships.in
Free posting on MyInternships.in is meant for paid roles. If your role is unpaid or carries a very low stipend, you will need a paid plan to publish it; see the options on the pricing page or employer plans. For paid roles, you can post an internship for free and reach our 63,000+ registered candidates. If you are hiring across several roles, hire interns by role or tell us your requirement on Hire Talent. Before posting, the internship policy template and internship agreement template help you put the terms in writing.
Frequently asked questions
Is it illegal to have unpaid interns in India?
There is no single central law that fixes a minimum stipend for private-company interns, so an unpaid internship is not automatically illegal. However, if the arrangement is really employment, with fixed hours and productive work but no learning component, labour and wage laws may apply. Check the current rules and take professional advice for your situation.
Is an apprentice the same as an intern?
No. Apprenticeships are governed by the Apprentices Act, 1961 and its rules, which include a stipend framework and registration. Internships are generally less formally regulated. Choose the arrangement that fits the role and follow the rules that apply to it.
Can I post an unpaid internship on MyInternships.in?
Free posting is meant for paid roles. Unpaid or very low-stipend roles need a paid plan to be published, and the options are listed on the pricing page.
Should I pay remote interns less than office interns?
Many employers pay remote interns somewhat less because there is no commuting or relocation cost, but the stipend should still reflect the value of the work. Consider a small internet or data allowance for remote roles.
More hiring guides
- Internship offer letter: clauses to include
- Internship certificates and experience letters
- How to write a job description for freshers
- Intern stipend benchmarks by role
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