India is slow in driving sustainability into its manufacturing economy as a growth strategy

India is slow in driving sustainability into its manufacturing economy as a growth strategy

India's textile and garment industry is making strides in ensuring ethical compliance and environmental standards in its factories. Yet gaps still exist, and filling these will be key if it is to reach its full potential, cement long-term relationships with brands, and compete more effectively in Asia.

According to the India Brand Equity Foundation July 2017 Report (IBEF), India's apparel textile and apparel sector is expected to be valued at US$226bn by 2023. This is total trade inclusive of domestic market and exports.

This immense potential is based on a number of factors related to the domestic population growth that is expected to reach 1.34bn by 2019 and higher foreign direct investment (FDI) along the entire value chain, from agricultural production to final manufactured goods.

However, while the IBEF 2017 report outlines the Indian textile and apparel market conditions, advantages and competitive forces it does not refer to the commitment towards sustainable policies for responsible supply chains. These circumstances indicate that there is still a long way to go to achieve improved ethical and environmental and the efforts are visible on the ground.

A slow drive to sustainability

India is slow in driving sustainability into its manufacturing economy as a growth strategy. The Indian Government has identified its textile and garment category as one of the 25 sectors capable of being a world leader, and has allowed the manufacturing sector to have 100% FDI. According to the Department of Industrial Policy and Promotion's 'Textile and Apparel Sector Achievement' report 2016, this sector is the second largest employment provider in the country, employing nearly 51m people directly and 68m people indirectly in 2016.

At a national level, one of the most recent initiatives by the Government is its 'Make in India' movement that promotes the strengths and advantages of the apparel and textile manufacturing sector for global recognition. Launched in 2014, it was developed to encourage companies to manufacture their products domestically.

The government's policy initiatives and investments in 2015/2016 were to support growth in exports for the textiles and apparel sector, which are estimated to reach $62bn by 2021 from $38bn in 2016.

The Indian government is also making efforts to ensure that the desired objectives are being achieved by creating awareness and facilitation. The Apparel Export Promotion Council (AEPC) is also playing an active role in promoting sustainability in the Indian textile industry. In 2017, the Council launched the Indian Apparel Industry Sustainability (AISA) programme that aims to reduce resource footprint by building business cases and align with a growing focus on sustainable production practices globally.

The programme is supported by sustainability advisory firm cKenetics as a partner, and is designed for Indian apparel exporters to enhance their competitiveness.

AISA aims to provide opportunities for India to differentiate itself in the global market and offer a sustainable value chain. It proposes to harness the industry's collective energy and capacity for innovation, and play an important role in creating a sustainable, fair and low-carbon world.

Local level sustainability

At a regional level, the knitwear region of Tirupur is innovating through using environmental-friendly printing and technologies to enhance its sustainable competitive advantage. The Tirupur knitwear cluster is a good example of how regional investment can strengthen the economic and social developments in knitwear manufacturing. The Tirupur Export Association has played an important role in driving new business opportunities that support a responsible supply chain.

Various manufacturers are using certification such as GOTs (the Global Organic Textile Standard) to attract new business opportunities and are now securing new retail and brand production orders. These knitwear producers are seeing the benefits of achieving growth through environmental investments and technologies and are investing in certification as a way of demonstrating their commitment to sustainable practices.

At the local level, progressive manufacturers are working with retailers to enhance their supply chain transparency and managing a stronger focus on sustainability. One such knitwear producer is Anugraha Fashion. Located in the Tirupur region, the company is driving better performance by adopting sustainable management strategies into its business model. Anugraha is managing change through a strategic approach to ensure supply chain transparency.

It states: "Ethical and environmental conditions and practices do attract international customers and enhance business volumes. With the current scenario, the growth of business is no longer a choice. Growth or perish."

In this organisation, top management teams take a strategic approach to achieving sustainability goals through training on a continual process. The company has undertaken a number of environmental strategies to address climate change, measuring carbon footprint for significant environmental impact at its manufacturing units and setting annual targets to improve performance. The company also has a number of ethical standards in place such as the Business Social Compliance Initiative (BSCI) and Social Accountability standard SA800, and uses Sedex (Supplier Ethical Data Exchange) as a key performance indicator.

Gaps in potential

According to the Global Apparel Forum's, 'How Indian apparel industry is moving towards sustainability' article of June 2017, these movements and efforts are generating results and bringing buyers closer to them. The benefits of investing in sustainability practices for the Indian apparel industry is the long-term stability and the alignment with brands' supply chains to ensure visibility to customers.

However, there seems to be a limited number of initiatives that are being developed and implemented at national, regional and local government levels to increase the profile and prospects of manufacturers in the apparel and textile sector.

The shift towards achieving excellence in sustainability through building long-term relationships with retailers who are demanding ethical and environmental standards in their supply chains is growing – but still gaps exist to achieve the potential.

India needs to create sustainable innovation in order to compete with other manufacturing economies such as Bangladesh that has free trade agreements with Europe and competes on price and volume.

About the authors:
Lynne Hammond is a freelance consultant/visiting academic/writer, based in London, UK. She is working on international fashion business and academic related consultancy projects for United Nations Industrial Development UNIDO and the British Council. She worked for London College of Fashion as a consultant and academic driving new international partnerships and collaborations to strengthen global connections and vision.

Rekha Dar is a marketing and sourcing consultant for the global fashion business value chain. With over 30 years of experience in the global fashion industry, she has worked as head of sourcing for Gap Sri Lanka and Benetton as well as other European brands. Her areas of expertise are: retailing, product, costing, sourcing off-fashion & lifestyle products, social compliance management, and vendor management.