EU’s new textile export rules likely to impose restrictions

The ecodesign rules are set to take effect 24 months after their publication in the official journal.

The European Union’s new ecodesign regulation, which imposes stringent sustainability standards on all products sold in the bloc, is anticipated to impact Indian exporters, especially smaller businesses. According to the regulation, the destruction of unsold textiles and footwear is prohibited, potentially limiting orders. The guidelines, issued recently, mandate criteria such as product durability, reusability, and energy efficiency. These measures are part of broader initiatives including the carbon border adjustment mechanism (CBAM) and deforestation regulations. The EU perceives the CBAM as a unilateral action that could face challenges at the WTO. The ecodesign rules are set to take effect 24 months after their publication in the official journal.

The European Commission stated that similar bans could be extended to other products in the future. “Certain products must meet minimum requirements for energy efficiency. These are known as ecodesign requirements, aimed at reducing environmental impact throughout a product’s lifecycle,” explained the EU on its website.

Mithleshwar Thakur, secretary general of the Apparel Export Promotion Council, commented, “While the industry adapts to the new ESG norms, sudden changes like these disproportionately affect smaller players.” Thakur suggested that the government address this issue in bilateral talks with the EU.

Textile industry is urging government to raise concerns during free trade negotiations, arguing that these norms could neutralise the benefits of tariff reductions being sought. Although the European Council has temporarily exempted SMEs from some aspects of the regulations, these measures are seen as insufficient.

The regulation encompasses a wide range of products, excluding cars and defence-related items. It introduces new requirements such as product durability, reusability, upgradability, reparability, and efficiency in energy and resources. Additional provisions address substances that hinder circularity, recycled content, remanufacturing, recycling, and environmental impact assessments.

News source: The Times of India