India Inc braces for sweeping labour overhaul, sees promise in new flexibility

Indian industry is preparing for one of its most significant operational shake-ups in years as new labour provisions kick in — reshaping salary structures, tightening compliance, and introducing mandatory health norms. Yet, despite the additional responsibility, corporate leaders say the reforms could ultimately sharpen India’s competitiveness, reported TOI.

Companies will now have to restructure employee pay packages, ensure annual health check-ups for all staff above 40, and extend gratuity to fixed-term employees completing one year of continuous service. But the rules also open long-awaited doors: greater flexibility in hiring women for night shifts, smoother management of seasonal workers, and more freedom to adjust factory or office timings.

“The apparel sector will immensely benefit from the change brought by allowing women to work at night in all types of work and across all establishments… This change will immediately address the capacity augmentation challenges in the sector and help India emerge as a major global sourcing hub for clothing,” Mithileshwar Thakur, secretary general of the Apparel Export Promotion Council, told TOI.


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For a garment industry that has long flagged stiff competition from Bangladesh, Vietnam and Sri Lanka, this clearance is a long-pending win.

In the IT sector, the government has reiterated that employees must be paid by the seventh of every month, alongside strict adherence to “equal pay for equal work.” “Nasscom will work closely with all stakeholders to help industry navigate this change with confidence,” the industry body said.

Ficci director general Jyoti Vij noted the broader improvements, saying, “The codes enhance industry competitiveness through single registration, reduced overlap, and streamlined processes, while ensuring minimum wages for all, improved OSH standards, annual health check-ups, maternity and social-security protections, and safer night-shift opportunities for women.”

CII echoed the sentiment, calling the provisions both overdue and transformative. “This long-awaited reform brings India in line with global standards, eases compliance, empowers enterprises, and strengthens the foundations for higher productivity, greater competitiveness and accelerated job creation,” said CII director general Chandrajit Banerjee.

As India Inc recalibrates its internal systems to meet the new requirements, the message from industry leaders is clear: the road ahead may be demanding, but the potential pay-off is substantial.

With inputs from TOI