It was founded on 31 October 1920 in Bombay by N. M. Joshi, Lala Lajpat Rai, and Joseph Baptista.
Till the eve of Independence, AITUC remained as the representative of the working class with all shades of political forces, ranging from the communists to the liberals, under its umbrella.
The federation underwent two major splits over ideological issues during this period.
The first split occurred in 1929 when liberals such as Giri, Joshi, and others broke away to form a separate federation over the issue of representation in the Royal Commission on Labour in India.
The communists and the supporters of the Indian National Congress in the AITUC wanted to boycott the Commission but the liberals (known as the Rightists) wanted to support it.
The Rightists broke away and formed the Indian Federation of Trade Unions (IFTU).
In the following year, the communists broke away to form the Red Flag Trade Union Congress.
However, they re-joined the AITUC within two years and the IFTU decided to merge with the parent body in 1939.
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