Textile Sector towards the Green Path

• 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.