Following the upcoming enforcement of the European Union’s (EU) environmental, social, and governance (ESG) standards, notably the Carbon Border Adjustment Mechanism (CBAM) in 2026, the Indian textile and garment industry is transforming to meet these challenges.
“To be ready to meet the ESG and CBAM norms, Indian textile exporters are transforming their traditional practices by not considering sustainability just like a compliance norm but as an initiative to strengthen their supply chains and position as prominent global suppliers,” media reports stated.
India and the EU are also amid talks on a free trade agreement, and the transformation to sustainable practices is expected to present an opportunity to leverage FTA benefits.
Tiruppur, which is considered the knitwear exporting hub of India, has taken several sustainable initiatives like installing renewable energy resources. Around 300 textile printing and dyeing units also discharge pollutants to a zero-liquid discharge common effluent treatment plant.
However, in the journey to adopting sustainable practices, the industry faces challenges like compliance costs and documentation requirements. A few brands, but not all, are willing to pay a premium for sustainable textile products, increasing manufacturers’ costs.
To help textile units meet the various challenges, various textile trade associations and the Indian Ministry of Textiles are trying to offer support, which includes establishing an ESG task team. Even financial companies are pitching in by giving funding for green projects.