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India’s Textile Sector and ESG Norm Challenges - Coggle Diagram
India’s Textile Sector and ESG Norm Challenges
Central Idea
EU's ESG goals necessitate compliance for India's textile sector to maintain global standing.
MSMEs in India's textile sector express challenges in meeting global ESG norms.
Environmental, Social, and
Governance (ESG) Norms
Encompasses principles, policies, and metrics for positive impacts on the environment, society, and governance.
Evaluates companies beyond financial performance in environmental, social, and governance factors.
Originated from the 2004 UN report "Who Cares Wins" linked to the Global Compact initiative.
India’s
Textile Sector
Significant producer of cotton, jute, silk, and PPE, employing 45 million people directly.
4.6% share in global textiles and apparel trade, 3rd largest exporter globally.
Expected textile exports to reach USD 65 billion by FY26, with a 10% CAGR from 2019-20 to USD 190 billion by 2025-26.
Contributes 2.3% to GDP, 13% to industrial production, and 12% to exports.
Challenges with
ESG Compliance
Challenges in maintaining quality of recycled fibers.
Reluctance of some global brands affects compensation for sustainable practices.
Fair labor practices leading to cost variations across states.
Insufficient marketing domestically leads to a lack of premium pricing.
Cumbersome processes, resource-intensive for smaller companies.
Varying codes across European countries create regulatory complexity.
Significant investments in sustainable practices challenging for MSMEs.
Initiatives in India's
Textile Sector
Showcasing Green Footprints: Clusters like Tiruppur showcase sustainability efforts at international events.
Best Practices: Tamil Nadu and Panipat exemplify successful sustainable practices in the textile sector.
Kasturi Cotton: Texprocil promotes Indian cotton brand supporting ESG norms.
Financial Support: Some financial institutions fund green and sustainable projects.
ESG Task Force: Ministry of Textiles forms task force for industry support.
Way Forward
Minimizing waste, encouraging recycling of textile waste.
Ensuring fair wages, safe working conditions, and workers' rights.
Prioritizing sustainable and ethically sourced materials.
Regular training on sustainable practices and ESG compliance.
Adoption of eco-friendly methods, minimizing resource use.