Addressing the 46th Indian Labour Conference, he said there is a thin line that separates the interest of workers and their unions and the same should be respected.
"Efforts would be made to modify labour laws through consensus," the Prime Minister said, adding that the consultation process with trade unions would continue.
Modi further said that the "obsolete and unnecessary" laws were being weeded out as part of the government's objective to achieve "minimum government and maximum governance".
The government has set up a high-level inter-ministerial committee under Finance Minister Arun Jaitley to evolve a consensus on labour reforms. The first meet, which was held yesterday, failed to make any substantive headway.
Talking about different interest groups, Modi said that there was a thin line dividing the interest of industry and industrialists, government and nation, and labour and labour organisations.
Often, one talks about saving the industry but ends up protecting industrialists, he said, adding that there is a need to recognise this thin line and adopt a balanced approach to the deal with the issues and change the environment.
Jaitley in his address warned of a threat to job creation if investments were blocked and appealed to the trade unions not to persist with ideas that harm economic activity.
"If we stop the fountain of investment, then employment will not increase, then economic activity will also not increase. And it becomes a threat to existing jobs," he said.
Reflecting signs of discord, National President of the BJP-affiliate Bharatiya Mazdoor Sangh (BMS) B N Rai attacked government for pursuing "few wrong policies" and stressed the trade unions will not allow reforms "at the cost of labour".
BMS, one of the biggest trade unions in the country, also demanded withdrawal of the industry-friendly factories Act enacted by BJP-ruled Rajasthan government as also the new labour laws by the Centre.

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