India’s new labour codes leads to global compliance into textile sector

India's massive textile and apparel sector, the country’s second-largest employer, has welcomed the full rollout of the four consolidated Labour Codes, effective November 21, 2025. The reform is hailed by industry bodies like the Southern India Mills’ Association (SIMA) as a strategic compliance catalyst, essential for meeting rising global demands, including the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), and securing future Free Trade Agreements.

The codes introduce important changes directly boosting manufacturing scale. Top among these is the provision allowing women to work night shifts with mandated safety, a game-changer for the female-dominated garment and spinning segments, enabling double-shift operations to manage seasonal export peaks. Furthermore, the provision granting gratuity to fixed-term employees after one year formalizes the employment of millions and helps reduce attrition.

By consolidating 29 archaic laws into a single framework with unified compliance, the government aims to create a more predictable, audit-ready supply chain, strengthening the financial outlook and international competitiveness of Indian fibre, yarn, and fabric producers.