Labour Codes to boost India's textile & apparel sector: CITI-LKS

The recently notified Labour Codes have the potential to vastly improve the competitiveness of India’s textile and apparel sector, but provisions related to the wage component and inter-state migrant workers would need careful navigation by textile and apparel units. Such was the view that emerged from a webinar on the Labour Codes, jointly organised on December 3 by the Confederation of Indian Textile Industry (CITI) and Lakshmikumaran Sridharan Attorneys (LKS).

Addressing industry participants, LKS executive partner Noorul Hassan noted that introducing the concept of “Floor Wage” may increase companies' costs. The cost of projects could also go up as a result, he pointed out.

Most companies in India’s textile and apparel sector are micro, small and medium enterprises (MSMEs) that operate on small margins.

The thinking behind a national floor wage set by the Central Government, based on minimum living standards, is to guarantee a basic income threshold, prevent wage-based migration across states and ensure that textile workers in low-wage regions receive fair and comparable remuneration.

Hassan said the Labour Codes encourage fixed-term employment. This would immensely benefit textile and apparel companies, considering the flexibility that they would now have in managing workforce strength as per the needs of the business.

The LKS executive partner said that the announcement of the Rules in connection with the Labour Codes could hold the answers to the successful implementation of the Codes. However, he pointed out that the provision related to the full and final settlement of employees has already gone into effect.

Speaking at the program, CITI chairman Ashwin Chandran said, "With the rationalisation of the 29 existing labour laws into four comprehensive Labour Codes on Wages, Industrial Relations, Social Security, and Occupational Safety, Health & Working Conditions, the Indian Government has initiated one of the most far-reaching labour reforms in recent times, which is aimed at:

• Simplifying and consolidating multiple legislations,
• Reducing the compliance burden for enterprises, particularly MSMEs, and
• Creating a more predictable and transparent regulatory environment for both employers and employees."

The CITI chairman said compliance and competitiveness must go hand in hand. As global buyers are increasingly focusing on labour standards, human rights, and responsible supply chains, understanding and implementing the Labour Codes effectively will not only help India’s textile and apparel companies meet domestic legal requirements but also strengthen the country’s positioning as a reliable and responsible sourcing hub, he added.

“The industry’s challenges in meeting compliance requirements stem not from unwillingness, but often from limited clarity in interpreting complex provisions. Through initiatives like today’s webinar, CITI remains committed to supporting the industry by enhancing awareness and capacity on labour-related compliances and helping enterprises adapt to new regulatory frameworks,” Chandran said.

ALCHEMPro News Desk (HU)