Will India’s New Textile Law Help Workers

Jeremy is a social activist fighting against unfair practices such as child labour, slavery and labour mistreatment. Jeremy has travelled around the world including: Africa, Asia, the Middle East and Eastern Europe. He has met many people, heard many stories, and tried his best to help those that were treated unfairly. While he was in Turkey, helping refugees, he heard that the Indian cabinet had recently approved a new textile policy that plans to generate employment.

Jeremy decided to travel to India to see how the new textile policy can help workers. He researched the policy to understand it has various benefits especially for women. His aim is to help individuals find an appropriate job that will help them out of poverty and secure a better living standard.

What is the aim of the new textile policy?

Will India’s New Textile Law Help Workers

The Indian cabinet has approved a new textile policy with plans to develop the Indian textile industry. Textile Secretary Rashmi Verma states that the new policy will generate employment as well as boost the economy and growth of textile exports.

The changes includes a INR 60 billion (GBP 675 million, USD 890 million) package for the textile and apparel sectors and an increase in overtime for workers. Overtime has been extended to 8 hours per week equating to 90 hours over three months, which meets ILO standards. The current law only allows for 50 hours of overtime over three months.

Other changes include tax incentives for hiring permanent workers, additional contributions into employer pension schemes from the government for low paid workers, and tax reclaims to boost export competitiveness.

Whilst in India, Jeremy met a couple of people that have been unemployed for several weeks because they were unable to find a suitable employer that does not mistreat their labour and pays fairly. Jeremy sees that many companies take advantage of their workers ignoring existing labour laws and denying unionisation. Jeremy hopes that through the new policy, labour laws will be strengthened and companies will provide a safe and reliable work environment. He is confident that many people will be able to find a job due to the likely increase in exports.

What does it mean for producers?

The Economic Times states the government’s aims to create 10 million new jobs over three years by attracting USD 11 billion of new investment generating USD 30 billion in additional exports. To do this the government is making it easier for producers to compete in the global market place, whilst taking away some of the burden of hiring permanent staff to help growth. A draw back cited by The Indian Express is that R&D support was not provided. Overall, for producers the new law is a good thing, and for businesses looking to use India as a manufacturing base India will become more competitive.

Priyanka is one of the many people Jeremy had met. She had been fired unfairly at her last workplace because she is pregnant and soon expecting. Supervisors told her that they do not allow pregnant women to work at the production facility. Priyanka was bound to a short term contract which allowed the factory to fire her immediately by not renewing the contract.

Jeremy talked to a number of people that required his help in understanding the new policy and its benefits. Jeremy explained that the new policy will allow employees to join a company which will provide long term contracts. Jeremy hopes that the new policy can help provide stable working conditions for women and men which inevitable leads to a better life.

What does it mean for workers?

With the incentives to hire more permanent staff, additional government contributions to pensions for low paid workers, more paid overtime for those who want to work longer hours, and treating seasonal workers similar to permanent workers, the headlines are good for workers. As recognised by the government, women make up nearly 70% of the garment industry’s workforce, so the new law will help social transformation through women empowerment. The additional job creation should put more people to work.

There may also be more in the pipeline. In an interview with The Economic Times, when asked about maternity leave, which is important considering most workers are women, Ms Verma stated the government “already has a scheme for supporting working women hostels, but [they] are going to enhance that scheme and give greater incentive to all those units which employ about 70% women”.

With all the positives taken into account, it would have been nice if labour laws and their enforcement were strengthened at the same time. As the sector grows, there is also more room for unscrupulous producers that will take advantage of these additional workers. The growth of the industry will help more people out of poverty through job creation, which is to be applauded, but the new law’s priority is to grab market share. Ms Verna states that India “will overtake Vietnam and Bangladesh in garment exports within next three years if [India] properly implement the package”. So working conditions are not directly tackled.

A producer with a good reputation for treating workers is looking to expand as they see greater demand for their clothes in the future due to the new textiles policy. Priyanka will be hired after her pregnancy, as the company is not willing to pay for Priyanka’s current maternity requirements, but at least she knows there is a job waiting for her. She knows she is lucky. Though Priyanka has secured a job with a reputable producer, she knows that there are many disreputable producers, and the new textiles policy will have little effect on ensuring they produce more ethically.

We hope that the new law helps to bring more people out of poverty through work. The trickle-down effect of wealth should have some impact on poverty, but this all depends on the law’s implementation and how the government ensures abuses are limited. If this is another “growth at any cost” policy, we don’t see workers receiving their fair share of the additional wealth creation. We live in hope!

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About the Author

Valentina is passionate in expressing her voice through her writing, which she hopes will have a social impact. She grew up as a third culture kid that always fought for what is right and achieved a BA Hons. in International Business in order to understand the business world more clearly and leave a possible mark on society. Currently she is working for an ethical start-up company called Chanzez. Chanzez has been set up to provide people with chances whether they are people who design clothes, people who work to make clothes or people who want to be able to buy ethically produced clothes.

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