Dear Texel,
You could have given sufficient information about the nature of your industry, what type of the trainees these are etc.
In certain industries like hotel industry, BHM students are allowed to work as "Industrial Trainees". They are allowed because it is part of their curriculum. This type of arrangement is made because students get industrial exposure during their education course and they become industry-ready i.e. they become employable. Sometimes, BHM students, during their summer vacation, work as industrial trainee on their own. In either case, hotels pay them some allowance. Since these are industrial trainees, they are not direct employees, hence PF is not applicable. However, their allowances are liable for ESI deduction.
In contrast, in some companies, freshly passed graduates are taken on roll and given the designation of "Trainee". Here the case is different and "Trainee" is a designation and they are full-time employees of the companies. Therefore, not just PF but all the statutory deductions become applicable.
Unfortunately in India, terms like trainees or apprentices are loosely used or used interchangeably. However, this is incorrect. Just today, I have given clarifying reply. Click the following link to refer it:
https://www.citehr.com/582730-employ...-trainees.html
Thanks,
Dinesh Divekar