Labour Codes promise gains for textiles but wage rules raise concerns: CITI–LKS Webinar

CITI–LKS webinar flags opportunities and challenges in new labour laws.

India’s newly notified Labour Codes are set to offer significant advantages to the textile and apparel sector, but key provisions on wages and inter-state migrant workers may require careful planning by companies. This was the central message at a webinar jointly hosted on December 3 by the Confederation of Indian Textile Industry (CITI) and Lakshmikumaran & Sridharan Attorneys (LKS).

Speaking to industry participants, Noorul Hassan, Executive Partner, LKS, said that the introduction of a national “Floor Wage” could raise operational costs, especially for companies operating on thin margins. As most textile and apparel units fall under the MSME category, even marginal wage increases could impact project feasibility, he noted. The floor wage, proposed by the Central Government to ensure fair and comparable minimum income across states, is also aimed at reducing wage-driven migration and ensuring uniform worker protection.

Hassan highlighted that the Labour Codes’ promotion of fixed-term employment would offer flexibility to textile manufacturers by allowing them to adjust workforce numbers according to business needs. He added that the detailed Rules to be issued for each Code would be crucial for effective implementation. The provision mandating full and final settlement of employees has already come into effect, he pointed out.

Addressing participants, CITI Chairman Ashwin Chandran said the consolidation of 29 labour laws into four comprehensive Labour Codes marks one of India’s most transformative labour reforms. The Codes aim to simplify legislation, ease compliance requirements—particularly for MSMEs—and create a transparent regulatory environment benefiting both employers and employees.

He emphasised that compliance and competitiveness must work together, especially as global buyers increasingly scrutinise labour standards, human rights, and responsible sourcing. Effective implementation of the Labour Codes, he said, would strengthen India’s reputation as a reliable sourcing destination.

Chandran added that challenges often arise from gaps in interpreting complex provisions rather than unwillingness to comply. He said CITI would continue supporting the industry through awareness-building and capacity initiatives to help units adapt to the new regulatory framework.