SIMA Applauds New Labour Codes as Historic Reform for Industry

SIMA welcomes the Government’s sweeping labour reforms benefiting industry and workers.

SIMA has hailed India’s new labour codes as a transformative milestone that simplifies regulations, enhances compliance, and strengthens the textile industry’s global competitiveness.

The Southern India Mills’ Association (SIMA), founded in 1933 under the guidance of India’s first Finance Minister, Late Sir R.K. Shanmukham Chetty, has welcomed the newly implemented labour codes as another landmark reform. As the apex body representing the textile value chain across South India, SIMA has consistently led efforts—both independently and through key industry platforms such as the Employers’ Federation of India (EFI), AIOE, EFSI, and ILO—to support balanced legislation that protects both industry and labour. The textile sector, the country’s second-largest employer after agriculture, provides livelihoods to over 110 million people, making labour reforms crucial for its sustainability.

For decades, the Association has advocated simplifying outdated labour laws and creating a unified framework to improve India’s global standing in social accountability. The Government of India’s introduction of the Industrial Relations Code (2020), Code on Social Security (2020), Occupational Safety, Health, and Working Conditions (OSHWC) Code (2020), and Code of Wages (2019)—officially effective from November 21, 2025—marks the consolidation of 29 labour laws into four streamlined codes.

In a statement, Mr. Durai Palanisamy, Chairman of SIMA, expressed deep appreciation to the Hon’ble Prime Minister for this bold and transformational reform. He noted that the new labour codes are a historic step forward, aligning with India’s journey toward Viksit Bharat and complementing earlier tax-related reforms. He emphasized that the updated framework will help Indian industries comply with international social responsibility requirements, including the Corporate Sustainability Due Diligence Directive (CSDDD) mandated by the European Union.

Mr. Durai further highlighted that the reforms strengthen India’s position in future Free Trade Agreements (FTAs) with the EU and the US, helping the textile sector unlock new global opportunities.

Key features of the new labour codes include:
• Flexible working hours
• Provision for fixed-term employment
• Level playing field in compliance costs
• Significant simplification of labour regulations
• Enhanced ease of doing business
• Pan-India certification, single license, and single registration
• Mandatory worker health checkups
• Compulsory issuance of appointment letters
• Measures to promote women’s employment and ensure night-shift safety
• Annualized gratuity benefits

While the cost of welfare provisions for workers may rise under the new codes, SIMA emphasized that employee well-being and rights are now more strongly safeguarded.