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  • Context (TH): With The European Union’s (EU) ESG goals, the Indian Textile sector faces a challenge.
  • India exports 16% of its cotton textiles, 40% of its synthetic fabric and 28% of its total apparel to European countries.
  • ESG stands for environmental, social, and governance framework towards ecological sustainability and ethical conduct of company or investment.

Current status of efforts

  • The Ministry of Textiles has formed an ESG task force for supportive interventions for the industry.
  • Cotton Textiles Export Promotion Council (Texprocil) promotes the traceable Indian cotton brand Kasturi.
  • Financial institutions are supporting MSMEs to fund green and sustainable projects.
  • Considerable documentation of various sustainable and inclusive social practices has already started.
  • Large-scale employment for rural women in the sector indicates a socially responsible industry.
  • Showcasing the green prints with supporting carbon data in international events is being undertaken.
  • Major garment exporters have begun releasing annual sustainability reports.
  • Many textile processing units in the Tiruppur textile cluster are connected to common effluent treatment plants with zero liquid discharge.
  • Panipat (Haryana) open-end spinners use only recycled fibre.
  • India recycles almost 90% of its used PET bottles into fibre.

Challenges in the green textile sector

  • 90% of garment exporters are MSMEs. Compliances and documentation come with additional costs, thinning the units’ margins.
  • Individual European countries are coming out with their codes.
  • ESG talks about ‘living wages’, which differ for each state, leading to differences in labour costs.
  • Import of hosiery waste from Bangladesh is increasing as demand increases for recycled fibre. However, the quality of regenerated cotton is not on par with fresh cotton.
  • Only some global brands are ready to pay a higher price to compensate for increased investment.
  • The domestic market is not yet developed for sustainable products.

Way forward

  • As the EU MSMEs are exempted from ESG norms, India should negotiate an exemption for MSMEs from ESG norms in the proposed EU FTA.
  • A separate Harmonised System code for the export of high-quality, sustainable products can be implemented.
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