According to a 2022 Ellen MacArthur Foundation report1, the fashion industry is responsible for around 10 per cent of global carbon emissions and 20 per cent of global wastewater and an estimated 92 million tons of textile waste are generated each year, which is expected to increase by almost 60 per cent by 2030 if no action is taken. Consequently, the industry is not so fashionable for our environment.
In 2020, 75 per cent of fashion companies polled by the Global Fashion Agenda, a non-profit organisation promoting sustainable fashion, had a recycling strategy, up from 45 per cent in 2017. In 2020, 88 per cent of fashion companies, up from 62 per cent in 2017, undertook one or more initiatives to adopt a circular economy model. A circular economy is a concept that intends to keep resources in use for as long as possible, through recycling, reusing, and reducing waste. This approach also focuses on minimising the use of non-renewable resources and reducing greenhouse gas emissions.
In a circular economy, stakeholders are linked in a closed-loop system and the industry’s success in implementing the model relies on collaboration from all the participants across the value chain. The key stakeholders for the fashion industry include raw material producers, suppliers, designers, printers, retailers, brands, influencers, regulatory bodies, and consumers along with other industries that have direct or indirect association with fashion.
How sourcing contributes to a sustainable circular economy
Rapidly evolving trends, constantly changing styles, and seasonal collections define the fashion industry. Fast fashion accounts for 20 per cent of global textile manufacturing and will grow to 60 per cent by 2030 (United Nations Conference on Trade and Development, 2019). This fast fashion, however, is slowly destroying the environment. According to Environmental Protection Agency, 2019, the average American generates 82 pounds of textile waste each year, and the majority ends up in landfills.2
To address the environmental impact of fast fashion, myriad of solutions such as reducing water usage, using sustainable materials, and collaborative efforts by different industries towards a circular economy are at the forefront. Sourcing sustainable materials requires significant investments in time and resources by a company. Companies do not just need to identify sustainable suppliers, but they need to assess their sustainability practices such as use of environmentally friendly materials, waste management strategies, carbon footprint of auxiliary services and labour practices. To source sustainable material, it is imperative to evaluate the region from where raw material and finished products are sourced.
India’s passion for sustainable fashion
India is fast emerging as a key sourcing destination helping the fashion industry address its environmental impact. According to a 2019 Business Standard report3, major international fashion companies such as H&M4, Levi’s, and Adidas have been sourcing environment-friendly textiles and products from India, indicating the nation’s dedication to environmentally friendly manufacturing practices and ethical sourcing. Indian textile exports to the United States soared by 8 per cent in 2020, with an increasing demand for sustainable and organic cotton products as per a report of Cotton Council International in 2021. According to India’s ministry of commerce and industry, the country’s garment exports reached $16.14 billion in 2019-20, a 6.3 per cent increase from the previous year, and registered a 10.8 per cent compound annual growth rate (CAGR) between 2015-16 and 2019-20. The United States is currently the main market for Indian garment exports, accounting for more than one-quarter of overall exports.
1. Traditional textile industry
India has a long history of using traditional textile techniques, such as handloom and natural dyeing, which are sustainable and have a lower environmental impact than industrial processes. According to a data published by Confederation of Indian Industry in 2019, Indian textile manufacturers are investing in sustainable and eco-friendly production processes, such as waterless dyeing and natural fibre blends. Moreover, India’s vast ecosystem of small and medium-sized enterprises (SMEs) and industry associations provide required resources and infrastructure to produce sustainable materials according to latest regulations and global market requirements as opposed to large mainstream manufacturers who have industrial production methods driven by profitability.
2. Government policies and environment commitments
India’s credibility towards responsible sourcing hub is bolstered by government trade policies. For instance, under their initiative, the ministry of textiles and the ministry of power enable Sustainable and Accelerated Adoption of efficient Textile technologies to Help small Industries (SAATHI). The country’s commitment to sustainability is also evident in its National Action Plan on Climate Change that outlines a comprehensive strategy for reducing greenhouse gas emissions and promoting sustainable development across various sectors, including the textile industry.
3. Labour laws and ethical sourcing
India’s well-established legislative structure that governs working conditions, pay, and social welfare is one of the primary advantages enabling ethical sourcing from the country. A comprehensive set of labour regulations protects the rights of workers and ensures fair compensation and safe working conditions. These statutes include, among others, the Minimum Wage Act (2012), the Factories Act (1948), and the Industrial Disputes Act (2010). They adhere to internationally recognised standards such as Fairtrade, SA8000, Sedex (Supplier Ethical Data Exchange), Sustainable Apparel Coalition’s Higg Index and Global Organic Textile Standard (GOTS), ensuring that their production centres meet workers’ rights, social communities, and local upliftment.
4. Indian fashion startup ecosystem
India has over 100 unicorns and Indian entrepreneurs raised $14.5 billion in 2020, making the country the third largest start-up ecosystem in the world. As per a report by Inc42, India is home to more than a thousand fashion startups which are committed to transforming this sector into a sustainable circular economy. These new age businesses are growing in popularity in India as more people become aware of the damage fast fashion can do to the planet. Many of these fashion startups are focused on selling products online, capitalising on India’s booming e-commerce market. According to a survey by RedSeer, online fashion retail in India is expected to reach $17.5 billion by 2023.
The way forward
The fashion industry’s impact on the environment can no longer be ignored. The need for sustainable solutions has become increasingly urgent. Sustainable sourcing through a trusted network of suppliers is the priority for fashion brands. While there are challenges associated in adopting a circular supply-chain, the benefits are significant. Companies that prioritise sustainability are not only helping the environment but also building a more resilient business. Consumers and industry leaders are increasingly becoming conscious of the environmental impact of their purchases, and companies that demonstrate a commitment to sustainability are likely to be rewarded with increased loyalty and business growth.
As the global businesses look for sustainable options to de-risk their supply chain, India is in a favourable position to capitalise on the changed dynamics of world trade. With focus on exports, India is reorienting itself to benefit from the growing popularity of ‘China plus one’ model. By 2030, India will have the capability and setup to export goods worth $1 trillion, putting it on the global sourcing map.