New Labour Codes To Boost Textile Competitiveness But Cost And Compliance Challenges Remain: Industry

ENA Sectors 2025-12-04 18:21:33 New Delhi, Dec 4 (KNN) The newly notified Labour Codes are expected to strengthen the competitiveness of Indias textile and apparel industry, though stakeholders caution that wage-related provisions and regulations concerning inter-state migrant workers may pose operational challenges. These views were shared at a webinar jointly organised by the Confederation of Indian Textile Industry (CITI) and Lakshmikumaran & Sridharan Attorneys (LKS) on Wednesday. Higher Costs Likely Under National Floor Wage LKS Executive Partner Noorul Hassan said the proposed national floor wage could raise labour costs across the sector, particularly for micro, small and medium enterprises (MSMEs) that operate on narrow margins. The floor wage—set by the Central Government based on minimum living standards—is designed to curb wage-driven migration between states and ensure more equitable earnings for workers in low-wage regions. While the measure would improve worker welfare, Hassan noted that companies must prepare for a higher cost structure and potential increases in project expenses. Flexibility Through Fixed-Term Employment Hassan added that the Labour Codes provisions on fixed-term employment could offer textile and apparel firms greater flexibility to adjust workforce strength in line with shifting business cycles. He said more clarity would emerge after the Rules are notified, although the requirement for full and final settlement of employees has already been implemented. A Major Step in Labour Reform CITI Chairman Ashwin Chandran described the consolidation of 29 labour laws into four comprehensive Codes—covering Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions—as one of the most significant labour reforms undertaken in India. He said the Codes are intended to simplify compliance, reduce the regulatory burden on MSMEs and create a more predictable operational environment. Chandran noted, The industrys challenges in meeting compliance requirements stem not from unwillingness, but often from limited clarity in interpreting complex provisions. He stressed that competitiveness and compliance must advance simultaneously, pointing out that global buyers increasingly demand higher labour standards and supply-chain transparency. Effective implementation of the Labour Codes, he said, would not only strengthen domestic compliance but also improve Indias standing as a responsible sourcing hub. (KNN Bureau) 44311 https://knnindia.co.in/news/newsdetails/sectors/new-labour-codes-to-boost-textile-competitiveness-but-cost-and-compliance-challenges-remain-industry 2025-12-04 18:21:33 knnindia.co.in New Labour Codes To Boost Textile Competitiveness But Cost And Compliance Challenges Remain: Industry