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.