India Accelerates ESG-Led Textile Transition With Green Tech, Circularity Push

India’s textile sector is witnessing a policy-driven shift towards environmentally sustainable production, as the government intensifies its focus on ESG-aligned manufacturing, green technologies, and circular value chains to boost global competitiveness.

According to an official release, a series of targeted interventions are being implemented to promote resource efficiency, reduce environmental impact and align the industry with evolving global compliance standards.

At the policy level, the government has constituted an Environment, Social and Governance (ESG) Task Force to steer discussions around sustainable production, certification frameworks and export readiness. The platform has enabled industry engagement through initiatives such as Circular Samvaad and the Cluster Exchange Mechanism, facilitating knowledge sharing and adoption of best-in-class practices across textile hubs.

Technology upgradation remains a key pillar of this transition. Under the Amended Technology Upgradation Fund Scheme (ATUFS), more than 1100 energy-efficient machines have been supported, driving improvements in water and energy consumption. Complementing this, the Integrated Processing Development Scheme (IPDS) has approved six Common Effluent Treatment Plants equipped with Zero Liquid Discharge (ZLD) systems, strengthening environmental compliance in processing clusters.

On the ground, pilot projects are being rolled out to build capacity and awareness around sustainable manufacturing practices. These initiatives span critical areas such as elimination of hazardous chemicals, development of eco-friendly and organic textiles, waste management and recycling, life cycle analysis, and carbon footprint assessment.

A notable intervention ‘Eliminating Hazardous Chemicals from Textile Fashion Supply Chain in India’, is currently being implemented across 400 factories in eight clusters and four fashion houses. The project is expected to mitigate approximately 1.47 lakh tonnes of CO₂ equivalent emissions while reducing hazardous chemical usage by over 10,500 tonnes, marking a significant step towards cleaner production.

Innovation in sustainable materials is also being supported under the National Technical Textiles Mission (NTTM), with multiple R&D projects focusing on next-generation eco-friendly technologies.

Further reinforcing the sustainability agenda, Nirmala Sitharaman, in the Union Budget 2026–27, announced an integrated programme for textiles, including the proposed Tex-Eco Initiative aimed at positioning India as a global hub for sustainable and competitive textile manufacturing.

With regulatory push, technology adoption, and industry participation converging, the sector is steadily moving towards embedding sustainability at scale, an imperative as global buyers increasingly prioritise ESG compliance in sourcing decisions.