In modern society, the fashion industry in India is growing with great speed. This industry is creating a lot of opportunities and also contributing to the growth of the country. One who is thinking about joining this industry must know about its legal and financial compliances. There are many laws and legislations that are applicable to this industry, just like the other businesses. After reading this blog till the end, one will be fully aware of the laws applicable to the fashion industry. It is a general suggestion to those who are in this industry or who are thinking about entering into this fashion industry: read the full blog to have complete knowledge regarding the laws and legislation that are applicable to the fashion industry, which will be directly or indirectly helpful for you to make your business successful.
What do you mean by the Fashion Industry?
In the old times, the fashion industry in India was just about clothing, but nowadays, it includes but is not just limited to the following:
- Designing, selling, and manufacturing different types of clothes included in this industry
- With clothes, footwear is also a part of the fashion industry nowadays hence, designing, selling and manufacturing footwear also falls under the same business category.
- Make-up and hairdressing have also become an intrinsic part of the fashion industry.
- Matching jewellery with clothes plays a very important role, which is the core reason to include jewellery in the fashion industry.
- Today, the fashion industry has become very giant and not just limited to clothes
Laws and Legislations Applicable to the Fashion Industry in India
Some of the key laws and legislation that will be applicable to the fashion industry in India are given below in detail for the reference of those who are in this industry or who are giving thought to entering into this industry:
Intellectual Property Laws
Intellectual property is one of the crucial laws for the fashion industry in India because fashion has many aspects that need to be protected under the IP laws. Some of the IP laws that are applicable in the fashion industry are given or mentioned below:
- The Copyright Act of 1957 saves the unique creations of fashion designers, which are their original works, through copyright registration
- Design piracy is one of the common threats in the fashion industry, and the Design Act of 2000 protects fashion designers’ designs under the same law of 2000.
- While giving specific recognition to the brands’ trademark plays a really important role, one must take trademark registration to protect their trademark under the Trademark Act of 1999.
- In the fashion industry, one more thing that is very common is an association of products with certain places. For example, Vanarasi silk sarees, Rajasthani choli, Gujarati gangra, etc., to protect their geographical indication, one can use the GI Act of 2000.
- The Patent Act of 1970 is another law related to IP protection, which is very useful in the fashion industry to protect the innovative designs of fashion designers through patent registration.
Labour Laws
As the fashion industry in India is growing, multiple fashion houses or companies are developed in India. There are thousands of people working in this industry, and for the protection of their rights, labour laws came into action. Some of the important labour laws which are applicable to the fashion industry are:
- The Payment of Wages Act came in 1936 and is applicable in this industry for the regulation of payment of wages to certain classes of employed person
- Indian Industrial Disputes Act of 1947 governs the disputes between the employer and employees
- Minimum Wages Act of 1948 is for the regulation of minimum wages to the employees
- Maternity Benefits Act of 1961 is for the protection of pregnant women’s rights. Under the same act, paid leaves have been given to the women during or after their pregnancy.
- The Payments of Gratuity Act of 1972 is for those employees who have worked continuously for one or more than one year in a company.
- The Sexual Harassment of Women at Workplace Act came in 2013 and also applies to the fashion industry.
Taxation Laws
Just like other industries, taxation laws are also applicable to the fashion industry in India. Mainly, there are two laws related to tax in India, which include the Goods and Services Tax Act of 2017 and the Income Tax Act of 1961. Compliance with these two laws is compulsory because ignorance can result in heavy fines and penalties, which will not be good for the business. One of the most important compliance under the GST laws is GST registration hence, if your business comes under the criteria where it is necessary to register for GST, you must take it so that your business can take various benefits of this registration.
Advertisement Laws
In the fashion industry in India, advertisement is a must. Whether a well-known big brand or a newly established brand, both need to advertise their goods and services to attract more consumers. But one thing they need to take care of is that the advertisement is not against the laws and legislation applicable to the respective industry. One should keep in mind that advertisements must not be misleading and fraudulent. They must be showing the true information regarding the goods or services.
Company Laws
To form or incorporate any kind of entity, company law will be required. There are various types of entities under the Companies Act of 2013. One who is going to start or enter the fashion industry in India can choose one of them. Some of the popular entities are Private Limited Company, One Person Company, and LLP. After the incorporation of the entity, all the rules and regulations given under the company laws will be applicable to the registered entities, and the owner of the business must have to comply with them. Noncompliance with the company law attracts heavy fines and penalties. Hence, you must comply with the applicable laws to secure your business from any such thing.
Environment Laws
Every industry has to make sure that they are complying with the various environmental laws that are applicable to their business. Because non-compliance attracts fines and penalties against the business, these fines and penalties are very heavy and enough to collapse one’s business. Hence, one must comply with environmental laws. The fashion industry in India is not special. Thus, they also need to comply with the same law.
Criminal Laws
Indian Penal Code of 1860 is also applicable to the fashion industry in India. Now you must be thinking about the connection between fashion and criminal law. Both are indirectly connected with each other. If any crime like fraud, cheating, infringement of copyright, trademark, etc, is committed, then IPC will be applicable because such crimes fall under this law only. This law prescribes not only fines but also imprisonment in certain cases. Hence, one must be aware of this law.
Consumer Protection Laws
Consumer rights also need to be protected in almost every industry. The governing law to protect consumer rights in India is the Consumer Protection Act of 2019. This law prevents any kind of fraud against consumers in India. Also, in case of any violation of their right as a consumer, they can file a complaint under similar laws. There are three authorities given under this law which are:
- District Consumer Forum
- State Consumer Forum
- National Consumer Forum
Legal Actions Against the Fashion Industry
Laws under which legal action can be taken against the owner of the fashion industry in India are given below:
- Industrial Dispute Act
- Trademark Act
- Copyright Act
- Patent Act
- Design Act
- Consumer Protection Act
- Indian Penal Code
- Competition Act
- Minimum Wages Act
- Gratuity Act
- Goods and Services Tax Act
- Income Tax Act
- Environment Protection Act
Government Benefits for the Fashion Industry in India
Some of the key benefits and initiatives of the government for the fashion industry of India are mentioned below:
- Promotion of handloom products
- Started the Make in India scheme and promoted textile industries
- Through the Startup India Scheme, the government is promoting newly established startups
- Tax exemptions
- Exemptions under the labour as well as environment laws
Conclusion
Non-compliance with the laws and legislations related to the fashion industry in India can lead to legal consequences for fashion industry stakeholders. Hence, it is compulsory for all businesses which are in the fashion industry to comply with the related laws and legislation. This will help your business to stand in the market between the competitors. On a positive note, the government has also introduced various initiatives and benefits to support and promote this industry, including schemes like Make in India and Startup India, tax exemptions, and incentives for handloom products, reinforcing its role as a key player in India’s economic growth and cultural landscape.
