Advancing Circularity in India’s Textile sector: Challenges, Opportunities, and the Role of Digital Transformation in Sustainable Production
Kavish Rungta
13/11/27
Although India’s "Make in India" campaign has driven rapid growth in the Micro, Small, and Medium Enterprise (MSME) sector, it has led to severe environmental degradation. India’s resource extraction rate exceeds the global average by 251%, with industrial SMEs consuming nearly 25% of industrial energy and contributing to the country’s high greenhouse gas emissions. Transitioning to a Circular Economy (CE) is essential for decoupling economic growth from environmental harm and achieving India's Nationally Determined Contribution (NDC) goals. However, CE adoption among Indian SMEs remains low due to technological gaps, regulatory uncertainty, missing inter-sectoral collaboration, and a lack of data-driven strategies.
This study examines circularity preparedness within India's textile sector, a major contributor to global exports and regional economic specialization across states like Gujarat, Tamil Nadu, Karnataka, and West Bengal. Despite its economic significance, the textile industry generates 7.7 million tons of waste annually and remains heavily polluting due to intensive water, chemical, and dye usage. Crucially, less than 1% of textile waste in India is currently recycled, constrained by poor infrastructure, product complexity, technological limitations, and low top-management commitment. Existing literature lacks micro-level diagnostic frameworks to guide firms across the design, production, consumption, and end-of-life stages.
To address this gap, this paper conducts a comprehensive literature review to identify the critical barriers hindering circularity in the Indian textile value chain. The study presents a strategic roadmap and actionable recommendations for CE implementation. Furthermore, it explores the integration of cross-disciplinary digital technologies to overcome these barriers, offering targeted technological requirements to accelerate the sector's scalable transformation toward net-zero and circular operations.