EU backs projects to strengthen India's textile industry

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Amber, India. Credits: Unsplash.

Last week, on February 15, the European Union (EU) and the Indian Ministry of Textiles jointly launched seven new projects to strengthen India’s textile and handicrafts industry. The initiatives, funded by the EU to the tune of 9.5 million euros (approximately INR 85.5 crore), were unveiled on the sidelines of the Bharat Tex event. They aim to promote inclusive growth, resource efficiency and sustainability in the Indian textile sector, while supporting women’s livelihoods and economic empowerment.

Implemented in nine Indian states

The projects will be rolled out across nine Indian states: Assam, Andhra Pradesh, Telangana, Uttarakhand, Uttar Pradesh, Odisha, Jharkhand, Bihar and Haryana, which will directly benefit approximately 35,000 people, including 15,000 micro, small and medium enterprises (MSMEs), 5,000 artisans and 15,000 farmers, over a period of three to five years. In addition, these initiatives are expected to economically empower approximately 200,000 women, contributing to a more inclusive and sustainable textile ecosystem.

The projects cover a range of processes such as production and promotion of natural dyes, bamboo handicrafts, handlooms, shawls and traditional textiles and handicrafts. The aim is to improve production, branding and market access for these areas. The initiatives will be implemented by various organisations including Humana People to People India, Deutsche Welthungerhilfe EV, Stiftelsen Världsnaturfonden WWF, Professional Assistance for Development Action, Network for Enterprise Enhancement and Development Support, Foundation for MSME Clusters and Intellecap Advisory Services Pvt Ltd.

Alignment with sustainability initiatives

This collaboration is part of the EU’s ongoing commitment to sustainability and circular economy in India, in alignment with the Indian Ministry of Textiles’ Bharat Mission for Textiles. The funding is associated with the EU’s Global Gateway Strategy and complements the ongoing EU-India Resource Efficiency and Circular Economy Initiative, says the BMUV (German Environment Ministry), co-funded by the German Federal Ministry for the Environment.

Speaking at the launch, Franck Viault, minister counsellor and head of cooperation of the EU Delegation to India, said: “As fast fashion dominates global trends, the EU and India are making serious efforts to make the textile industry more sustainable. India’s rich textile heritage is recognised internationally, including in Europe. By combining tradition, innovation and technology, the Indian textile sector can leapfrog towards a sustainable future. As a key partner, the EU is committed to supporting India’s circular economy agenda, sharing best practices and promoting environmentally friendly practices in this vital sector.”

Launch of the 'Textiles Toolkit'

In addition, the “Textiles Toolkit”, developed in collaboration with GIZ, was launched to promote the circular economy and resource efficiency in the sector.

India plans to boost its textile and garment industry by proposing measures such as financial support, tariff cuts on key inputs and incentives for local production in the upcoming budget, Reuters reports. The move is aimed at attracting global retailers looking for alternatives amid the political crisis in Bangladesh.

Currently, Indian manufacturers face high labour costs and excessive regulation, the Wall Street Journal stated, which is hampering factory expansion and pushing companies to more competitive countries like Bangladesh and Vietnam. The term “excessive regulation” may come as a surprise, but it is recognised that India has complex and often strict labour laws. This complexity can discourage investment and limit companies’ operational flexibility.

Furthermore, the Indian textile industry is benefiting from positive momentum due to continued trade facilitation efforts. India has set up a National Trade Facilitation Committee (NTFC) to spearhead the implementation of the WTO Trade Facilitation Agreement (TFA). By reducing the time and costs associated with trade transactions, this initiative is helping to make the Indian market more attractive to foreign investors. According to the WTO, full implementation of the TFA could reduce trade costs by an average of 14.3 percent and increase global trade by one trillion dollars annually, with developing countries recording the largest gains.

By reducing tariffs on raw materials and textile machinery, India could improve the competitiveness of its fashion sector, attract more foreign investment and strengthen its position in the global textile market.

This article originally appeared on FashionUnited.FR. It was translated to English using AI.

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