In the recently concluded COP 28 in Dubai, 197 countries, including India, have unequivocally pledged to reduce greenhouse gas (GHG) emissions and reinforced their commitment to the 2015 Paris Climate Agreement.
India, in particular, has already accelerated its transition into green economy. In the last year’s Union Budget, the government made its intentions in this direction further clear by explicitly expressing its keenness to keep up with the 2015 Paris Agreement. This year, too, the Budget is expected to up the ante on the previously announced sustainable economy policies.
India, however, will highly bank on its manufacturing sector to turn green in order to make the shift. The term “green manufacturing” originated in Germany in the late 1980s and is involved in the whole product lifecycle. It intends to address all five areas: green resources, green design, green production, green manufacturing, and green disposal.
While this shift holds good for the entire manufacturing sector, the textile industry will have a substantial role to play: it contributes approximately 2.3% to the GDP, 13% to industrial production and 12% to exports. On the flipside, it is being called out for its environmental pollution because of its heavy dependence on non-renewable resources.
To progress in this direction, it is important that we acknowledge the challenges and work towards tangible solutions. The Indian textile and garment manufacturing value chain is complex and fragmented with multiple players involved. This causes difficulty for manufacturers to efficiently transition to sustainable manufacturing practices. The supply chain, too, faces certain issues such as lack of information, transparency, and cultural and language differences.
This leads to an inadequate information exchange system, rational training, and knowledge within businesses, as well as poor distribution of data between vendors.
Further, manufacturers seldom get to form long-term collaborative relationships. They also face challenges like heavy competition. With multiple manufacturers from different competing nations bidding, it is difficult for one manufacturer to transition to more sustainable practices, since transitioning requires cost investment and a constant orders. Moreover, even though some buyers in the garment industry have multi-year relations with some of their manufacturers, stability in orders is also a rarity.
In the current context of hyper-competition and overcapacity among manufacturers competing to sell to well-known brands, price negotiations are very intense. The brands at times switch manufacturers on specific orders for a fraction of a cent difference per unit. This uncertainty, too, leads to lack of manufacturers’ will and financial capacity to transition.In addition to these key challenges, infrastructure-related challenges followed by regulatory-related challenges have been the other major challenges. Infrastructural challenges include lack of in-country technological development leading to inefficient and old machines being used that consume more resources and emit more pollutants than newer ones.
Other infrastructural hindrances include acute shortages in power supply, lack of efficient transportation and financial issues like high cost of disposal of hazardous waste or eco-friendly packaging and high implementation cost for green technologies. Regulatory challenges, too, seem to be favouring linear manufacturing.
This being said, the Indian textile industry has been witnessing a rapid structural progression since 2010 in order to meet the needs of the stringent global buyers.
This is driven by a shift in consumer consciousness, with an increasing number of individuals prioritizing sustainability.
A market analysis conducted by Bain & Company reveals that approximately 15% of global fashion consumers have expressed concerns about sustainability and are consistently make purchasing decisions to lower environmental impact. This number is expected to surge to over 50% in the upcoming years, indicating a significant trend toward sustainable practices. In the United States, 78% of consumers express that a sustainable lifestyle is important to them, according to a study by NielsenIQ.
The evolving dynamics of consumer behaviour also highlight gender-specific preferences, particularly among female consumers. A survey by McKinsey indicates that 58% of female respondents below 35 years have said they go out of their way to buy clothing, accessories, and shoes from sustainable brands. This is significant as American women accounted for 80% of consumer spending compared to men, according to another survey.Customer is now at the centre of the chain, thanks to the surge in e-commerce. To meet the expectations of environmentally conscious consumers, manufacturing brands have adapted to on-demand designs, altering the entire production-to-selling process. Today, clothes are ordered before they are made, a departure from the traditional model where items were produced first and then sold. This shift aligns with the principles of sustainability, minimizing waste and responding directly to consumer demands. In addition to shifting consumer preferences, international regulations imposed by major export destinations, including the USA and the UK, are steering brands towards compliance with green manufacturing standards. The stringent rules and regulations set by these nations necessitate a fundamental change in manufacturing processes to align with environmentally friendly practices.
Brands that prioritize green production and manufacturing lines stand to benefit from this changing landscape.
Recognizing the need to address the concerns and expedite green manufacturing, the government has taken proactive measures. Production-Linked Incentive (PLI) schemes, the announcement to create an ESG task force, multiple textile-related projects such as Project SURE, Scheme For Integrated Textile Park (SITP), Silk Samagra, Powertex India, and Samarth serve as a testimony to its commitment.Mega-investment textile parks have especially been playing a crucial role in furthering India’s green manufacturing agenda. Different establishments, especially in southern India, have started organising into clusters or into bigger, integrated units with all processes under one roof: dyeing, weaving, washing, cutting and stitching. Several clothing units have also taken advantage of the government’s Technology Upgradation Fund Scheme (TUFS) to expand and modernise their units.
Having all of the processes under one roof enables ease in investing in waste management systems such as wastewater treatment plants, which would be a very high investment for individually functioning decentralised manufacturing units.
Additionally, these mega parks aim to have the entire manufacturing value chain in the same area. Research shows that firms that operate within the composite product category have better means to implement the circular economy business model and perform better in sustainability because the entire production process – from raw materials to finished goods – takes place under one roof; such a production process requires less transportation and results in a smaller carbon footprint during distribution and is easier to compare the logistics of reuse, recovery, recycling and so forth. This is of significant importance for India as 80% of the country’s total garment is unorganised, which generally suffers from fragmentation and technology obsolescence, leading to inadequate ability to produce high-quality fabric.India’s gross expenditure on research and development (R&D),
too, has seen a rapid increase in recent years from Rs 394.4 billion (approximately USD 482.6 million) in 2007–08 to Rs.1.1 trillion (approximately USD 13.45 billion) in 2017–18.
This leads to a rise in potential for R&D labs working in relation with marketing, production, development of new eco-friendly substitutes like development of biodegradable and environmentally sustainable .enzyme options for traditionally used enzymes for fabric softening process which also reduces water consumption or development of new techniques for salt-free dyeing of cotton with reactive and direct dyes that reduces excessive water use.
India’s textile industry has come a long way in the last few years and it shows a promising growth. However, to harness its full potential, a multifaceted strategy is imperative. A holistic approach encompassing legislation, collaboration, consumer education, and technological advancement is vital for a sustainable future in the textile industry.
By N Chandran,
Chairman Eastman Exports
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