While the Indian textile industry is increasingly positioning itself as sustainability-ready and export-focused, Divya Shetty assesses how far these claims are translating into real compliance and alignment with evolving global sustainability standards.
India’s textile and apparel sector stands at a historic crossroads. Historically celebrated as an industrial powerhouse fueled by abundant raw materials and generation-spanning manufacturing expertise, the industry is experiencing an unprecedented systemic shift. The traditional metrics of commercial success—speed, volume, and rock-bottom pricing—are being rapidly superseded by a new and uncompromising global mandate: sustainability. Driven by sweeping legislative overhauls in foreign markets, evolving brand expectations, and rising consumer awareness, the sector is forced to fundamentally re-examine its identity. This transformation raises an unavoidable, high-stakes question: Are Indian textile manufacturers genuinely implementing sustainable, circular operations across their supply chains, or are they relying on cosmetic public relations and superficial frameworks to mask systemic environmental damage? Is the sector building a fortress of authentic compliance, or is its green banner an elaborate illusion?
The authenticity question
The central debate surrounding sustainable textiles centers on the authenticity of compliance. While marketing campaigns frequently deploy comfortable, vaguely defined terms like ‘eco-friendly’, ‘natural’, or ‘green’, the realities of the factory floor demand strict, auditable accountability. Rajeev Gupta, Joint Managing Director, RSWM, notes that leading, listed textile organisations in India have graduated past superficial public relations, integrating deep environmental infrastructure directly into their long-term corporate growth blueprints. For these large players, sustainability represents an existential market imperative rather than a standalone corporate social responsibility project.
According to Gupta, “Recent industry studies, nearly 74 per cent of leading listed textile companies in India have adopted Zero Liquid Discharge (ZLD) systems, while waste recycling levels across the sector have reached close to 80 per cent. This indicates that sustainability investments are increasingly becoming part of core manufacturing operations rather than standalone initiatives. At the same time, the focus globally is shifting from broad sustainability claims to data-backed accountability. Buyers today expect measurable disclosures around water usage, emissions, renewable energy adoption, recycled content, and supply-chain transparency, supported through third-party audits and traceability frameworks.”
However, this corporate standard does not define the entire industry. Devyani Hari, Senior Director, Centre for Responsible Business (CRB), provides a more nuanced view of the supply chain, emphasising that while the shift in corporate dialogue is undeniable, the physical reality across the textile landscape remains highly uneven. Large international and domestic brands have successfully driven internal operational improvements and are now pushing compliance mandates down into the supply chain, often enforced through rigid private certifications. Yet, as one descends past the primary exporters, transparency rapidly deteriorates, leaving the lower tiers of the value chain highly vulnerable to unverified or superficial practices.
Hari adds, “Supply chains are quite opaque. The final exporters, which is Tier 1, and Tier 2, where processing happens, are visible to some extent. But as you go lower down, it becomes very difficult to make the entire supply chain traceable. So, this is not a black-and-white question. If you ask whether the sector is investing in sustainability and circularity, the answer is yes, but to different extents depending on their capacity and motivation. Broadly, what is driving this includes regulatory pressure, buyer requirements, and in some forward-looking cases, access to sustainable finance. Consumers are also becoming more aware.”
Rahul Bhajekar, Managing Director of GOTS, addresses the greenwashing divide directly, pointing out that uncertified, self-declared claims pollute the marketplace and undermine the massive investments made by compliant manufacturers. In the absence of strict, unbroken chain-of-custody documentation, corporate statements regarding sustainability are functionally meaningless.
“The picture is mixed, and the gap between genuine implementation and compliance exists, but it is narrowing. India is one of the world’s largest textile producers and has major strengths… However, the broader industry landscape still contains a large informal or semi-formal tier where sustainability claims are largely self-declared. Marketing language such as ‘eco-friendly,’ ‘natural,’ ‘green,’ or ‘sustainable’ appears on product tags and company websites without any underlying certification or independent verification. This is a textbook definition of greenwashing — not necessarily always with intent to deceive, but certainly without the rigour to substantiate the claim,” states Bhajekar.
Identifying the gaps
To address these systemic vulnerabilities, India must confront several operational and structural gaps across its value chain. Ashwin Chandran, Chairman, CITI, points out that the fundamental challenge begins with data architecture. Without robust, digitalised tracking mechanisms that trace raw material inputs from farm to retail rack, Indian exporters face significant market access barriers, particularly as Western regulatory frameworks transition from voluntary guidelines into law.
He says, “The biggest sustainability gaps in India’s textile value chain and those that need urgent fixing relate to challenges associated with Collection, Compilation and Monitoring of data and, by extension, Traceability; Processing; and the Fragmented nature of this MSME-dominated industry. These lead to uneven compliance standards countrywide. Without ‘Fibre-to-Fashion’ digital tracking and robust ESG data systems, Indian exports risk being locked out of markets governed by the EU’s Digital Product Passport (DPP).”
Chandran highlights that wet processing—specifically dyeing and finishing—remains the most carbon-intensive and water-reliant segment of the lifecycle, demanding immediate transitions to Zero Liquid Discharge and renewable energy grids within decentralized production clusters. This assessment is shared by Madhu Sudhan Bhageria, MD, Filatex India, who identifies the fragmented nature of the secondary tiers as the primary stumbling block to sector-wide compliance readiness. The vast majority of spinning, weaving, and chemical processing runs through small, undocumented micro-enterprises where structured carbon accounting or digital data storage is practically nonexistent.
From the fast-fashion sourcing perspective, Sanjay Shukla, Team Leader, Triburg, offers a sharp critique of the historical and structural power dynamics driving the sector. Shukla argues that the global fashion infrastructure, designed by Western retail giants, built its immense profitability on high-velocity production models and extreme price suppression, forcing developing manufacturing nations into unsustainable practices. Now, the same brands demand structural sustainability transformations while refusing to adjust their baseline buying behaviors or absorb the associated compliance costs.
“Where was sustainability when the concept of fast fashion was born? Did it not promote irresponsible buying for the sake of multi-fold profits? Why are the manufacturing countries being forced to now go ‘sustainable’ while global brands don’t spare a thought about their buying patterns? There are no measurables in this area. Each of these metrics can be challenged,” Shukla opines.
Redefining Cost vs. ROI
The financial math governing sustainability investments reveals a stark contrast in perspectives between manufacturing executives and sourcing intermediaries. Historically, capital allocations toward green energy or zero-waste infrastructure were viewed as optional expenses. Today, they are increasingly recognised as an inescapable license to operate. Bhageria argues that evaluating these large-scale capital investments through a conventional, short-term return on investment lens misinterprets the structural realities of the modern global marketplace.
Chandran, states that ‘the ROI on sustainability investments for many Indian companies is not always what they gain but what they don’t lose.’ Global retail buyers, operating under intense public and regulatory pressure, increasingly view compliance as a baseline entry requirement rather than a premium product attribute.
For publicly listed conglomerates like RSWM, these heavy upfront costs are counterbalanced by crucial financial and reputational gains, including improved relationships with the international investor community and protection against operational margin erosion. Gupta notes that RSWM’s integrated approach—combining renewable energy adoption with value-added sustainable product development—directly supported the corporation’s financial turnaround in FY26, yielding a revenue of Rs 45.54 billion, an EBITDA of Rs 3.27 billion, and a PAT of Rs 520 million. The commercial reality shows that while premium pricing remains restricted to specialised niches, the true financial return is measured in long-term contract retention, expanded order programs, and continued access to protected high-value markets.
The regulatory wave
The momentum driving India’s sustainability transition is accelerated by a tightening web of Western regulatory frameworks. Voluntary corporate policies are being rapidly replaced by enforceable statutory mandates. The European Union’s Eco-design for Sustainable Products Regulation (ESPR), the Corporate Sustainability Due Diligence Directive (CSDDD), and upcoming Digital Product Passport (DPP) frameworks will soon require comprehensive data capture across every phase of production. Bhajekar emphasises that these impending regulations represent a significant commercial shift, moving from private compliance checks to mandatory border requirements.
“Initiatives such as the EU Green Deal, ESPR, CSDDD, and future Digital Product Passport requirements are increasing expectations around traceability, due diligence, and supply-chain transparency. In this evolving landscape, internationally recognised standards such as GOTS can help companies build more robust compliance systems and prepare more effectively for future regulatory and buyer expectations. By combining environmental and social criteria with traceability and independent verification, GOTS certification can provide companies with a more structured pathway toward compliance readiness,” informs Bhajekar.
Large, export-oriented Indian manufacturers are relatively well-positioned to navigate this legislative shift, given their existing use of advanced enterprise resource planning (ERP) software, supply chain mapping, and third-party certifications like GOTS and OEKO-TEX. Yet, India’s overall industry preparedness remains uneven. Hari emphasises that the incoming regulatory frameworks assume a level of digital infrastructure that the vast majority of Indian MSMEs simply do not possess. Valuable data often remains trapped in manual, paper-based ledgers instead of being recorded digitally, creating an immediate technical barrier to generating necessary compliance documentation.
Shukla expresses profound skepticism regarding the equity of these global ESG mandates, arguing that Western retail brands should demonstrate internal operational accountability before penalising manufacturing nations. He asserts, ‘In my opinion, first the brands should publish their carbon footprint, their contribution towards a green industry and only then talk about ESG norms. Indian textile industry had the lowest carbon footprint till the time brands forced them to be faster and cheaper. This is the collateral damage we are seeing as a reality today.’
Geopolitical dynamics
In the global geopolitical theater, India competes directly against manufacturing ecosystems like Bangladesh, Vietnam, and Turkey. India’s primary structural advantage lies in its comprehensive, end-to-end integrated value chain—spanning raw agricultural fiber cultivation, advanced spinning mills, diverse weaving clusters, and massive garment assembly plants. Competitors typically rely heavily on imported yarns or fabric inputs. However, Bhageria warns that this raw material advantage risks being neutralised by the agility and coordinated policy support enjoyed by regional rivals.
Chandran highlights that sustainability is now a critical prerequisite for achieving India’s aggressive geopolitical export ambitions, including the national target of driving textile and apparel exports to $100 billion by 2030. Maintaining the status quo is an unviable option that directly threatens millions of manufacturing jobs. While competitors like Bangladesh and Vietnam have built highly compliant, green-certified, and export-oriented production hubs, India’s highly fragmented domestic supply chain continues to slow its progress. Shukla offers a sobering assessment of this competitive gap, stating that India remains significantly behind in implementing essential common infrastructure.
“Indian industry has a long way to go… leadership position is a mirage. The countries in your list have amazing support from their respective governments to establish best practices for creation of sustainable textiles. Common ETP plants, clean energy sources, carbon sequestering are a few examples where India needs to catch up. We are at least 15 years behind,” Shukla adds.
The path forward
To transition from uneven compliance to global leadership, the Indian textile sector must develop a highly coordinated, multi-stakeholder ecosystem. Chandran calls for an immediate, unified national roadmap backed by clear timelines and designated responsibilities split between Central and State governments. Encouraging fiscal signals have emerged in the latest Union Budget, notably the Textile Expansion and Employment Scheme—aimed at modernising traditional clusters through capital support and common testing facilities—and the Tex-Eco Initiative, designed to foster sustainable apparel production. However, Chandran notes that flawless execution remains the critical factor.
Ultimately, the domestic consumer market must be mobilised. While international buyers enforce rigid standards, India’s massive domestic consumer base remains largely indifferent to circular labeling or organic verification. Policymakers can leverage state-backed initiatives like Mission LiFE (Lifestyle for Environment) to build public awareness and drive domestic demand for sustainable textiles, providing MSMEs with a viable domestic market for their certified products.
India’s sustainable textile journey cannot be defined by a simple binary choice between genuine transformation and greenwashing. Instead, it represents an intense structural battle between its world-class corporate entities and an expansive, under-resourced informal sector. The path forward requires converting this fragmented value chain into a cohesive, digitally integrated ecosystem. If large exporters, industry bodies, and government agencies successfully collaborate to provide affordable financing, common digital traceability platforms, and green infrastructure for smaller players, India can secure its position as a trusted, responsible textile partner to the world. If the sector fails to bridge this gap, its structural advantages will be lost, leaving its green aspirations as an unrealised opportunity.
Quotes to highlight
- Ensuring equitable access to technology and finance for MSMEs is what the Indian textile and apparel sector needs to make the big leap on sustainability.”
- Ashwin Chandran, Chairman, CITI
- “Brands want the maker to absorb all costs associated with making sustainable garments. They want the credit for a green brand without paying a penny for it.”
- Sanjay Shukla, Team Leader, Triburg
- “For the bulk of Indian textile output, buyers expect sustainability at the same price or with only a marginal premium.”
- Madhu Sudhan Bhageria, Chairman & MD, Filatex India
- “Nearly 74 per cent of leading listed textile companies in India have adopted Zero Liquid Discharge (ZLD) systems.”
- Rajeev Gupta, Joint Managing Director, RSWM
- “Tiruppur is moving towards zero liquid discharge, driven initially by regulatory push, but now they see the value and continue.”
- Devyani Hari, Senior Director, Centre for Responsible Business (CRB)
- “Independent third-party verification remains the most credible way to distinguish a genuine sustainability claim from greenwashing.”
- Rahul Bhajekar, Managing Director of the Global Organic Textile Standard (GOTS)
Segment readiness
As per the industry experts, the below are the sectors which is strong and which needs to be worked upon;
- Upstream Strength (Spinning): This sector is highly consolidated, capital-intensive, and the most sustainability-ready due to its close physical proximity to raw fiber stages.
- Downstream Vulnerabilities (Wet Processing): Dyeing and finishing remain highly carbon-intensive and water-reliant, heavily dominated by fragmented, decentralized clusters lacking structured carbon accounting.
Geopolitical Matrix: India vs. Competitors
| Metric / Dimension | India’s position | Competitor Landscape (Bangladesh, Vietnam, Turkey) |
| Value chain integration | Major Strength: Complete end-to-end ecosystem from raw agricultural fiber to garment assembly. | Weakness: Heavy reliance on imported yarns and fabric inputs. |
| Common infrastructure | Lagging: Needs to rapidly scale common ETP plants, clean energy grids, and carbon sequestering. | Advanced: Strong, highly coordinated government policies and green-certified export hubs. |
| Target milestone | $100 Billion national textile export goal by 2030. | Actively competing for the same high-value market share. |