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For over a decade, Lululemon Athletica embodied everything the premium athleisure revolution stood for technical mastery, community-driven branding, and an almost cult-like customer following. Its rise was clean and uninterrupted, a masterclass in premium positioning. But 2025 has delivered an uncomfortable reality check. The brand that once defined the category is now battling a simultaneous slowdown in its core North American market and mounting pressure to reinvent its product engine without losing the premium halo that made it a global phenomenon.
The company is not in crisis. Far from it, internationally, Lululemon remains a juggernaut nowhere more so than China. Its balance sheet is strong, margins remain healthy, and its store network is expanding. Yet beneath the surface, the brand is confronting an important truth: the machine that propelled years of hyper-growth is no longer self-sustaining in North America. Shoppers are fatigued. Competitors are hungrier. And product cycles that once felt timeless now read as repetitive. This is Lululemon’s first real inflection point.
North America stalls as tariffs bite
For a company that earns more than two-thirds of its revenue in North America, the latest quarterly numbers land like a warning shot. In Q2 FY2025, total net revenue grew 7 per cent but only because the international business carried the weight. In its home market, growth is almost at a standstill.
Table Lululemon Q2 FY2025 performance
Q2 Fiscal 2025 Result Implication Total Net Revenue Growth +7% (to $2.5 billion) Overall growth is slowing but still positive, buoyed by international. North America Revenue Growth +1% Near-stalled growth in the core market. North America Comparable Sales -4% (Decline) Direct evidence of falling demand and customer fatigue. International Net Revenue Growth +22% Primary engine for achieving the 'Power of Three x2' strategy. China Comparable Sales +17% Highlighted as a key high-growth market. Full-Year Revenue Guidance Revision From $11.15B-$11.30B to $10.85B-$11.00B Reflects lower expectations due to U.S. softness and tariff costs.
The table paints a stark divergence: while China grows at double digits and new global markets accelerate, the US is posting its weakest performance since the mid-2010s. Compounding the slowdown is an unexpected cost shock. With the removal of the de minimis exemption on imports, Lululemon now faces meaningful reciprocal tariff impacts. CEO Calvin McDonald has quantified this at 220 basis points of gross margin erosion, or $240 million in fiscal 2025 alone. The stock market delivered its own verdict: Lululemon shares are down over 50 per cent YTD as of October 2025, its sharpest sell-off since going public.
How predictability became a liability
For years, Lululemon’s formula worked beautifully: timeless silhouettes, high fabric quality, and periodic introductions of new colors or capsule collections. But the consumer is changing and so are competitors. Lululemon’s predictable playbook, once a strength, now feels stale to many long-term customers. CEO Calvin McDonald has admitted that the brand’s lounge and social categories 40 per cent of the total mix “became too predictable.” The symptoms were visible to anyone watching the brand closely:
Stale offerings: Core categories remained dominated by repeated silhouettes and a limited color palette, making once-beloved staples feel unexciting.
Slow trend response: While smaller brands like Alo and Vuori were sprinting to claim emerging microtrends, Lululemon lagged behind. The pickleball boom, the explosion in women’s golf apparel, and the rise of aesthetic-driven loungewear all delivered opportunities that Lululemon failed to seize quickly.
Quality question marks: Loyalists on Reddit forums and social media have complained about discontinued fabrics, thinning leggings, inconsistent sizing, and a perceptible shift away from performance-first design. For a brand built on technical precision, even perception issues can be damaging.
Fewer store visits, higher prices, more dupes
Store-level data points make the slowdown sharper. Customer traffic in US stores is down 8.5 per cent YoY, a clear reflection of waning product excitement. And in a high-inflation environment, Lululemon’s $98-$128 leggings are increasingly competing with $25 dupes on Amazon, TikTok, and big-box retailers.
Competitors today span every price tier. For example, Vuori dominates softness and versatility. Alo owns the social-media aesthetic. Athleta pushes performance credibility. Zara and Gymshark outpace Lulu in speed-to-trend. The premium athleisure category Lululemon once built is now swarming with challengers.
A crowded arena of giants and specialists
To understand Lululemon’s present-day threat matrix, it’s important to examine the competing brands grouped by type.
Table: Major competitors
Competitor Type Brands Core Focus/Edge Against Lululemon Global Sportswear Leaders Nike, Adidas, Under Armour, Puma Scale and Brand Recognition: Massive global market share, superior distribution networks, and a performance-first heritage. They can offer a wider range of technical products and cross-category penetration (e.g., footwear, major sports). Premium Athleisure & Lifestyle Alo Yoga, Vuori, Athleta (Gap Inc.), Sweaty Betty Specialized Niche & Design: Brands like Vuori have surged with a focus on versatile, incredibly soft, "everyday" athleisure that mimics the comfort of Lululemon's core fabrics. Alo Yoga capitalizes heavily on a stylish, celebrity-driven, social media-friendly aesthetic. Athleta offers a strong high-quality alternative, backed by Gap's scale. Value & Fast-Fashion Fabletics, Gymshark, Zara, Private Labels (e.g., Costco) Price and Speed: Offer similar aesthetics and often "dupes" of popular styles at significantly lower price points (e.g., Fabletics' subscription model). They can respond more quickly to fleeting social media trends.
Despite the challenges, Lululemon maintains a strong competitive position built on four core pillars.
1. Premium brand loyalty and pricing power: Lululemon has fostered a quasi-cult following and a strong community connection (e.g., through in-store yoga classes, brand ambassadors). This high brand affinity allows it to command premium prices that competitors often struggle to match without losing credibility.
2. Superior material innovation (the science of feel): The brand is renowned for its proprietary, high-quality technical fabrics (Luon, Nulu, Luxtreme), which provide a superior fit, comfort, and performance that is difficult for competitors to replicate consistently, thus justifying the premium price.
3. Direct-to-consumer (DTC) model: With over 780 company-operated stores and a strong e-commerce platform, Lululemon maintains full control over pricing, inventory, and the customer experience, reducing reliance on third-party retailers and protecting its premium image.
4. International growth engine: The successful execution of its ‘Power of Three x2’ strategy, aiming to quadruple international revenue by 2026, has made its global segment (led by China) a vital growth counterbalance to the sluggish North American market.
Lululemon’s most important gamble in a decade
Leadership knows the brand must change. And fast. The company has initiated the most sweeping overhaul of its creative and product strategy since the early 2010s. The centerpiece of this revival is Global Creative Director Jonathan Cheung, whose appointment signals a shift toward faster, more expressive, more fashion-forward design.
The new product mandate is to increase new style penetration from 23 to 35 per cent by Spring 2026; launch new sub-lines like Loungeful and Big Cozy; integrate AI-led design tools to speed trend recognition and prototyping; expand into more lifestyle-driven categories without diluting performance DNA. If this works, Lululemon can reignite the North American business and reclaim leadership in premium athleisure. If it doesn’t, the brand risks confusing loyal customers while failing to win over new ones. Analysts widely agree, the 2026 product reset will determine the next decade of Lululemon’s growth path.
Levi Strauss & Co. (LS&Co.), the nearly 175-year-old denim pioneer, is forging its next chapter by strategically embedding Artificial Intelligence into its operations. Following robust Q3 2025 results; net revenues up 7% to $1.5 billion and a record gross margin of 61.7%, the company is accelerating its shift to a Direct-to-Consumer (DTC)-first model, targeting a $10 billion retailer goal. The most recent and central initiative is the partnership with Microsoft to develop an integrated agentic AI platform centered on a "super-agent."
Rewiring the apparel workflow
This next-gen super-agent, powered by Microsoft Azure and embedded in Teams, is designed to unify and automate complex corporate workflows across IT, HR, and operations, with an internal rollout planned for early 2026. This move is part of a broader strategy where AI is also directly enhancing the customer-facing retail experience. The company has already launched 'Outfitting,' an AI-driven styling feature on its app that provides personalized recommendations, and is expanding STITCH, an AI assistant for store employees, to 60 US locations. As Chief Digital and Technology Officer Jason Gowans states, "AI sits at the center of that pivot... elevating employee creativity, unlocking productivity and helping us deliver connected, memorable experiences."
The DTC-First growth challenge
The new agentic AI platform acts as a critical operational backbone to support the aggressive DTC growth plan, which saw e-commerce revenues jump 18% in Q3 2025. By streamlining internal processes, the super-agent tackles the challenge of managing the massive influx of data from a growing DTC channel (46% of total net revenues). Microsoft’s Nick Parker notes, "Their commitment to purposeful innovation is redefining retail excellence." The combined internal efficiency and personalized consumer experiences are the key to Levi’s ambition, moving beyond its iconic 501 Jeans to become a head-to-toe lifestyle apparel brand known for agility and operational excellence.
Brand management powerhouse Marquee Brands has announced the acquisition of Stance, the innovative lifestyle sock and underwear label, positioning the group firmly in the rapidly growing premium apparel accessories sector. Founded in 2009, Stance is globally recognized for transforming the mundane sock into a high-margin fashion essential, leveraging bold design and successful collaborations with sports leagues and cultural figures. The addition of Stance expands Marquee’s collective retail sales footprint to $4.5 billion.
ULAC partnership and category entry
The acquisition’s immediate strategic thrust is driven by a global licensing partnership with United Legwear and Apparel Co. (ULAC), which will manage Stance’s product design, development, and distribution worldwide (excluding China). This structure targets the global socks and underwear market, which is projected to expand at a Compound Annual Growth Rate (CAGR) exceeding 7% through 2030, fueled largely by athleisure adoption.
Marquee’s plan is to immediately push Stance into new activewear and footwear categories. While the licensing model offers accelerated expansion, the core challenge remains, as Marquee CEO Heath Golden noted, preserving Stance's signature creative identity and "cultural touchpoint" while achieving mandated global scale.
Topshop, the iconic British youth fashion brand founded in 1964, is slated for a major global relaunch in 2026, including a rapid expansion into twenty new international markets. The move is the first major strategic initiative since ASOS sold a 75% stake in the label to investment firm Heartland in 2024, forming a joint venture aimed at bolstering the brand's global retail presence beyond its digital anchor.
Digital anchor, physical reach
The expansion is central to the JV's strategy to capture new demographics. Having returned to the French high street and secured a UK partnership with John Lewis, the focus shifts to leveraging the brand’s pre-existing appeal in new territories. The parent company, ASOS, reported a 60% rise in Adjusted EBITDA (to £132m) in FY25, driven by a strategic shift toward higher-quality sales. The Topshop relaunch is positioned to capitalize on this renewed financial discipline.
Margin growth meets maximalist demand
This global push faces a complex retail environment where the BoF-McKinsey 2026 forecast predicts only low single-digit growth. The challenge lies in balancing affordability with the high quality needed to justify improved gross margins, which ASOS successfully lifted by 370 basis points (to over 47%) last year. A spokesperson stated, "We are merging profitability with purpose, ensuring the 'cult denim' and expressive styles Gen Z craves are accessible but also deliver sustainable margin." The case study of its successful UK physical return signals appetite for the brand’s nostalgic yet maximalist aesthetic globally.
The Government of India is set to immediately trigger the $2.81 billion Export Mission Framework (EPM) guidelines this week, a move acting as a financial shield for the textile and apparel industry facing unprecedented US tariff shock. The sector, responsible for significant employment, saw a double-digit decline in October, with apparel exports shrinking 12.88% year-on-year, primarily due to the steep 50% tariff imposed by the US since August. This immediate injection aims to stabilize the reeling industry.
Direct financial blitz for MSMEs
The six-year, ₹25,060 crore EPM is structured around two sub-schemes: Niryat Protsahan (₹10,401 crore) and Niryat Disha (₹14,659 crore). The focus of Niryat Protsahan is a direct financial blitz for Micro, Small, and Medium Enterprises (MSMEs), which comprise a large part of the textile value chain. Measures include interest subvention (subsidy on loan interest) and collateral guarantees to ensure affordable trade finance. This direct fiscal support is crucial to help MSMEs sustain orders and avoid mass layoffs, addressing the challenge of costly capital compared to rival exporting nations.
Technical Textiles: The resilient growth bet
A new angle of the government's strategy is the powerful bet on Technical Textiles—specialized products like medical gear and construction fabrics, which offer higher margins than traditional apparel. The EPM's non-financial arm, Niryat Disha, will fund international branding and quality compliance, accelerating diversification away from traditional, highly competitive markets.
The EPM is set to fast-track the sector's goal of reaching $100 billion in T&A exports by 2030 by focusing on such resilient, future-ready products.
The upcoming Blossom Première Vision (PV) event, set for December 10 and 11, 2025, in Paris, hosting 65 premium textile suppliers (20% new), has established itself as the indispensable sourcing hub for the luxury apparel industry’s pivot toward compliance. The show floor directly reflects the urgency driven by stringent European eco-design laws, notably the French levy, which is set to fine ultra-cheap clothing up to €10 per garment by 2030, and the looming 2026 EU ban on destroying unsold goods.
PV’s Focus: Weaving compliance and heritage
The event’s selective exhibitor list emphasizes verifiable sustainability. Innovators, like the Italian Slow Fiber collective, are championing transparent, circular production models. Historic houses, such as France's Les Tissages Perrin (since 1929), are leveraging heritage techniques for durability and traceability. Suppliers confirm compliance is paramount, as the apparel segment holds nearly 50% of the $9.19 billion sustainable fashion market in 2025.
SS27: Outlook and strategic sourcing
Première Vision (PV), established in 1973 as the sourcing platform, is guiding the market by confirming that aesthetics for the Spring-Summer 2027 (SS27) pre-collections are now inseparable from traceability. This "Premiumization Driven by Purpose" is necessary, as data shows consumers are willing to spend an average of 9.7% more on ethically produced textiles. The selection of exhibitors—from organic ramie by Tosco to circular wool by Manteco—underscores Blossom PV’s role in steering the industry toward durable, compliant materials.
India is emerging as a global powerhouse in technical textiles, a growth recognized by the organizers of the world's leading technical textiles and textile processing trade fairs. Ahead of the Techtextil and Texprocess 2026 event in Frankfurt, Messe Frankfurt's Director Brand Management, Sabine Scharrer, highlighted during a lunch meeting addressing to the media, during Techtextil India, the strategic importance of India, declaring the country's technical textile sector is "important for the world."
Scharrer underscored the nation's rapid expansion and its growing role as a crucial market for innovative and high-tech textile applications.
Surging growth and market leadership
Citing impressive figures, Scharrer pointed to the significant participation from India in previous events, stating, "Last year, we welcomed 64 Indian companies, a total of more than 600 visitors." The momentum is driven by fundamental market strengths. The technical textile sector in India is experiencing a strong growth rate of up to 10 percent, with the segment's market value standing at a significant $29 million USD. Furthermore, India is identified as one of the leading export markets, excelling particularly in the segments of Inditech (Industrial Textiles) and Pactech (Packaging Textiles). Other sectors like Geotech (Geotextiles) and Home Tech (Home Textiles with technical functionality) also play a substantial role in the country’s high-tech textile landscape.
"Especially the technical tech sector is growing in India and that's why this country is so important for us and, frankly, important for the world," Scharrer emphasized, noting the sector's pivotal role in India, mirroring its importance in various European countries.
Focus on innovation and skill development
The sector's growth is supported by a strong foundation in research and development. Scharrer noted the "clear commitment" and industry meetings in India dedicated to R&D projects in technical textiles, which helps "grow the skills and the ethic of figures in the technical tech sectors." This focus is yielding tangible results in the form of smart innovations. India is seeing "a lot of smart innovations coming up," such as integrated services applied in fields like agriculture, defense, or medicine. Additionally, the country is setting a "big example" by enhancing standard products with advanced functionality.
"We're excited to see what the Indian producers will bring in the next edition also in April, frankly, and in the future," Scharrer concluded, anticipating strong engagement from the Indian technical textiles industry at the upcoming global fair.
Global gateway in Frankfurt
Techtextil and Texprocess 2026, scheduled for April 21-24, 2026, serves as the premier international platform, bringing together the entire value chain under one roof in Frankfurt, Germany. As one of the world's largest platforms for technical textiles, advanced fabrics, and garment machinery, the combined fair allows visitors to explore the full textile chain, from fiber production and advanced machinery to innovative fabrics, end-use applications, and recycling technologies. The global nature of the event, with 1,600 plus exhibitors in the last edition (65% from abroad), provides Indian participants with unparalleled access to international trends and technologies. On the Techtextil side, the event showcases high-tech materials across diverse applications, including medicine, mobility, construction, military, and security purposes.
Meanwhile, Texprocess focuses on the future of textile processing, featuring cutting-edge machinery, 3D/4D applications, scanning, optimization, and AI solutions. The event is further enriched by specialized areas, including the newly dedicated segments for textile chemicals/dyes and performance apparel textiles, and the expanding Nature Performance area which highlights sustainable, bio-based, and bio-degradable materials.
Dedicated focus on ‘Textile Chemicals & Dyes’
Techtextil 2026 will feature Textile Chemicals & Dyes as a separate, independent product segment for the first time, reflecting its growing economic importance and technical relevance, especially in performance textiles. This new area will be strategically located in Hall 9.0, placing it in immediate proximity to the Fibres and Yarns and Performance Apparel Textiles segments. This deliberate co-location is designed to create new synergies, facilitating direct dialogue between suppliers of pre-treatment, dyeing, and finishing agents and the users of technical and functional textiles. This centralized hub will emphasize the importance of chemicals and dyes in providing essential functions to textiles—such as water-repellent impregnation for outdoor wear, sterilization for medical fabrics, UV protection for construction materials, and flame-resistance for protective apparel—and will serve as a platform for addressing increasing demands related to environmental regulations and sustainable supply chains.
The Frankfurt fairs offer Indian companies a critical opportunity to expand their international reach, explore global trends, and solidify their position as leaders in advanced, value-added textile manufacturing on the world stage.
Just days after the Indian government withdrew Quality Control Orders (QCOs) on Polyester Textured Yarn (PTY) and other textile inputs to boost the cost-competitiveness of the downstream industry, the Directorate General of Trade Remedies (DGTR) has initiated a fresh anti-dumping investigation into PTY imports originating from or exported by the People's Republic of China (China PR). This immediate counter-move by the domestic PTY manufacturers, led by industry giants, sets up a direct conflict that could see the benefits intended for India’s exporters completely nullified by new protective duties.
The Core Conflict: QCO relief vs. Anti-Dumping protection
The recent withdrawal of QCOs on PTY was hailed as a significant relief by the downstream textile sector (garment and home textile manufacturers).
● QCOs impact: Previously, QCOs mandated BIS certification, which was a time-consuming and expensive process, especially for foreign suppliers. This restricted supply and pushed domestic PTY prices 15–30% above global benchmarks, hurting the export competitiveness of Indian textiles.
● QCO rollback goal: The rollback was intended to ease regulatory burdens and allow manufacturers access to raw materials at internationally competitive prices, improving their standing in the global Man-Made Fibre (MMF) market.
However, domestic PTY producers (the upstream industry) are now fearing a surge in aggressively priced imports from China, a global leader in PTY manufacturing, following the removal of the QCO protection. The new anti-dumping probe is a direct response to this threat.
● Anti-Dumping allegation: The applicants, including Reliance Industries Limited and Wellknown Polyester Limited, allege that PTY from China PR is being dumped in the Indian market at prices below its normal value, causing material injury to the domestic industry.
● Injury evidence: Prima facie evidence accepted by the DGTR shows that imports have increased significantly in volume (absolute and relative terms) during the Period of Investigation (POI). The domestic industry is reportedly experiencing price suppression/undercutting, financial losses, cash losses, and a negative return on capital employed.
DGTR's Prima Facie Findings
"The applicants are in losses and are incurring cash loss. Further, the applicants have earned a negative return on capital employed.", mentions DGTR Initiation Notification, citing the applicants' injury claim. The DGTR initiation notification, dated November 20, 2025, outlines the foundation of the investigation:
● Product Under Consideration (PUC): Polyester Textured Yarn (PTY), also known as Drawn Textured Yarn (DTY), classified under HS Code 5402 33 00. Exclusions include PTY made from non-PET materials like nylon, polypropylene, and polyethylene.
● Subject Country: China PR.
● Period of Investigation (POI): April 1, 2024, to June 30, 2025 (15 months).
● Basis of Dumping: Since China PR’s costs and prices may not be market-driven, the DGTR, for initiation purposes, determined the Normal Value based on the export price of PTY from a third country (proposed as Singapore to India).
● Dumping Margin: A comparison of the Normal Value and the Export Price (based on DG Systems data) showed a dumping margin that is above the de minimis level and significant, providing sufficient prima facie evidence for initiation.
Will the QCO removal impact be negated by Anti-Dumping Duty?
The benefits of the QCO rollback for the downstream industry are highly likely to be negated if the DGTR recommends, and the Ministry of Finance imposes, a definitive Anti-Dumping Duty (ADD).
The goal of the QCO removal was to lower input costs, while the goal of the ADD is to impose a duty that raises the price of dumped imports up to the "normal value" or to an extent that eliminates the injury to the domestic industry. If a duty is imposed, it would effectively re-introduce a price barrier on Chinese PTY imports, driving up the raw material costs for downstream Indian manufacturers, thus undoing the competitiveness gains achieved by the QCO withdrawal.
Challenges & future plans
The immediate consequence is a fierce trade policy debate pitting the upstream producers against the downstream exporters.
|
Stakeholder |
Perspective & Plan |
Challenge to Trade Policy |
|
Upstream Domestic PTY Producers (e.g., RIL, Wellknown) |
Seek ADD to eliminate unfair price injury from Chinese imports, safeguard market share, and restore profitability/return on capital. |
Risk making PTY uncompetitive again for downstream exporters, potentially forcing them to use inferior domestic substitutes or curtailing exports. |
|
Downstream Textile Exporters (Garments, Home Textiles) |
Want open imports at global prices (benefit of QCO rollback) to boost global competitiveness and achieve India's textile export targets. |
Face the challenge of increased input costs if ADD is imposed, which negates QCO benefit and jeopardizes their global price competitiveness. |
|
Government/DGTR |
Must balance the protection of the domestic PTY manufacturing industry (upstream) from dumping against the need to ensure low-cost raw materials for export-intensive sectors (downstream). |
The two trade remedy actions (QCO rollback and ADD initiation) appear contradictory, creating regulatory uncertainty in the polyester value chain. |
The DGTR has invited all interested parties, including exporters, importers, and the Chinese government, to submit information and comments on the scope of the PUC and PCN methodology within strict deadlines. The final recommendation will determine if India prioritizes domestic PTY manufacturing protection or the broader, export-oriented downstream textile value chain.
The full implementation of India's four consolidated Labour Codes (The Code on Wages, The Industrial Relations Code, The Code on Social Security, and The Occupational Safety, Health and Working Conditions Code) marks a strategic overhaul of the country’s industrial framework, particularly benefiting the export-driven textile and apparel sector. This modernization is a direct response to rising global demands for ethical sourcing and social accountability, exemplified by the European Union’s upcoming Corporate Sustainability Due Diligence Directive (CSDDD). Industry experts view the codes as a critical tool to ensure Indian factories are audit-ready, strengthening the supply chain's ability to maintain high compliance standards necessary to access major international markets.
The four new consolidated Labour Codes represent a strategic and historic overhaul of India's labour ecosystem, replacing 29 fragmented central laws with a unified framework. These codes were made effective from November 21, 2025, with the goal of expanding social security, formalizing employment, and streamlining compliance to align with global standards like the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD).
What are these four consolidated ‘Labour Codes’
1. The Code on Wages, 2019
This code consolidates four laws relating to wages, bonus, and equal remuneration.
● Universal ‘Minimum Wage’: Establishes a statutory right to minimum wages for all employees across the organized and unorganized sectors.
● National floor wage: Requires the Central Government to set a floor wage based on minimum living standards. State governments cannot fix minimum wages below this national threshold, ensuring uniformity.
● Wage definition standardisation: Standardizes the definition of 'Wages' across all four codes. Employers must ensure that at least 50% of the total remuneration qualifies as 'basic wages' (including basic pay and dearness allowance). This change is intended to increase the corpus for social security benefits like gratuity and pension.
● Overtime: Mandates that overtime work must be compensated at least twice the normal rate of wages.
2. The Industrial Relations Code, 2020
This code consolidates three laws governing trade unions, conditions of employment, and industrial disputes.
● Fixed-Term Employment (FTE): Provides clear legal sanction for fixed-term employees. FTEs are now entitled to the same wages, social security, and benefits (like medical cover and paid leave) as permanent workers on a pro-rata basis.
● Gratuity for FTEs: Critically, it allows fixed-term employees to qualify for gratuity after just one year of continuous service, formalizing employment for many workers, especially in the textile sector.
● Dispute resolution: Introduces a framework for the recognition of a sole Negotiating Union (with 51% or more support) to streamline collective bargaining and reduce disputes.
● Strikes and lockouts: Requires a mandatory 60-day notice period for workers planning a strike and employers planning a lockout, promoting industrial peace.
3. The Code on Social Security, 2020
This code consolidates nine laws related to social security provisions.
● Universal Social Security net: Extends social security coverage (including insurance, provident fund, and maternity benefits) for the first time to gig workers, platform workers, and all unorganized workers.
● Aadhaar-Linked portability: Mandates the creation of a national database for unorganized workers, issuing a unique, Aadhaar-linked ID that makes social security benefits fully portable across state borders for migrant workers.
● Expanded ESIC coverage: Extends the Employees’ State Insurance Corporation (ESIC) scheme coverage across India.
● Maternity benefits: Retains 26 weeks of paid maternity leave and requires establishments with 50 or more employees to provide creche facilities.
4. The Occupational Safety, Health, and Working Conditions (OSHWC) Code, 2020
This code consolidates 13 laws concerning safety, health, and working conditions for workers.
● Night Shift for women: Permits women to work night shifts in all establishments (including factories) with their consent and mandatory adequate safety measures. This is a major enabler for export-oriented units to run double/triple shifts and scale up production.
● Mandatory appointment letters: Makes the issuance of a formal appointment letter to every employee compulsory, furthering the formalization of employment.
● Health and Welfare: Mandates free annual health check-ups for all workers over 40 years of age in specific establishments.
● Paid Leave: Reduces the eligibility period for earning one day of annual paid leave from 240 days of work to 180 days.
Compliance and business streamlining
Collectively, the codes introduce systemic reforms aimed at promoting Ease of Doing Business and global compliance:
● Single compliance regime: Replaces multiple registration, license, and return requirements with a Pan-India single registration and license system.
● Inspector-cum-Facilitator: Replaces the punitive "Inspector" role with an "Inspector-cum-Facilitator" model, emphasizing guidance and compliance support over rigid policing.
● Decriminalization: Replaces imprisonment with monetary fines for many minor, first-time offenses, encouraging voluntary compliance.
Scaling production with worker welfare
A key feature impacting manufacturing scale is the provision permitting women to work night shifts with their consent and mandated safety measures. This change is a game-changer for the female-dominated garment industry, allowing factories to operate double or triple shifts and significantly boost overall production capacity to meet seasonal export peaks. Simultaneously, worker security is enhanced: fixed-term employees (FTEs) now qualify for gratuity after just one year of service, down from five years. This measure formalizes the employment of up to 110 million textile workers and reduces high attrition rates in labor-intensive units like spinning mills.
Major Indian textile players view this reform as essential for their growth plan. Arvind, with its robust retail presence, relies on a highly competitive and ethically compliant domestic supply chain. The predictable, formalized labor environment provided by the new codes helps its sourcing partners maintain their financial outlook while ensuring the social compliance required for brand reputation and continued retail expansion against global competitors. The Southern India Mills' Association (SIMA) hailed the reform as a "historic achievement" that facilitates a level playing field in compliance costs.
The Directorate General of Trade Remedies (DGTR) has issued an Initiation Notification (Case No. AD(OI) 50/2025, dated 20th November 2025), launching an anti-dumping investigation into imports of Polyester Textured Yarn (PTY), also known as Drawn Textured Yarn (DTY), originating from China PR. PTY is the critical synthetic raw material that underpins India’s strategic pivot towards Man-Made Fibre (MMF) fashion, which accounts for approximately 75% of global fibre consumption and is essential for athleisure and technical apparel.
Financial injury to integrated supply chain
The probe follows a substantiated application by domestic majors, alleging that the dumped imports have caused material injury. Evidence points to severe price suppression, with the domestic industry reporting losses and cash losses, alongside a negative return on capital employed over the period of investigation (April 2024 to June 2025). This instability in core raw material cost directly erodes the export competitiveness of Indian garment manufacturers, challenging national plans to scale up MMF capacity.
The investigation underscores the vulnerability of vertically integrated players, those having strategically invested in a new Performance fabrics production to capture global demand for high-value synthetics. The DGTR's intervention is seen as vital for protecting the financial outlook of the MMF base that ambitious textile growth depends upon.
