The Indian textile industry stands as one of the largest contributors to the nation’s economy, providing employment to approximately 45 million people and accounting for a significant portion of industrial production and exports. However, the industry remains entrenched in a linear economic model—characterised by excessive resource consumption and waste generation—that poses serious environmental concerns.

A transition towards a circular economy (CE), where waste is minimised, and resources are reused efficiently, is crucial for the sector’s sustainability. A recent study undertaken by the authors explores the current state of circularity in India’s textile industry, highlighting gaps in policy and infrastructure while identifying key opportunities for transformation (Saha & Pati, 2025). This transition requires an extensive overhaul of the industry’s current approach, from design and manufacturing to consumer behaviour and waste management.

Despite its economic significance, India’s textile industry lacks a dedicated policy framework to support circularity. The study conducted an extensive text mining analysis of government policies and engaged in in-depth interviews with industry stakeholders to assess the adoption and readiness for CE practices. The study reveals:

  • Lack of Policy Recognition: Text mining of government policy documents, including those from the Ministry of Textiles, Niti Aayog, and the Central Pollution Control Board, found no direct references to textile circularity. While terms like ‘sustainability’ and ‘recycling’ appeared frequently, there was no clear strategy for textile waste reduction or circular business models.
  • Insufficient Government Support: Existing policies focus on waste management in other industries (e.g., municipal waste, electronic waste, and scrap metals) but do not extend the same structured approach to textiles.
  • Limited Infrastructure for Recycling: The study found that India lacks adequate recycling plants and technological support for textile waste management. Most recycling efforts are confined to craft clusters and small-scale informal industries, rather than large-scale industrial adoption. The lack of appropriate segregation methods for different textile materials further complicates the recycling process.
  • Gaps in Stakeholder Involvement: Interviews with industry experts revealed that awareness about CE principles is low among textile manufacturers and policymakers. Without structured guidelines and financial incentives, stakeholders lack the motivation to transition to circular practices. Furthermore, retailers and consumers play a critical role in CE, yet they remain largely uninformed about sustainable practices and textile disposal methods.
  • No Dedicated Budget for Circularity: Although the Ministry of Textiles is formulating a new Sustainable Textiles Policy, the study found that budget allocations for CE initiatives remain uncertain, delaying potential advancements. Without financial backing, businesses are hesitant to invest in the costly infrastructure required for large-scale adoption of CE practices.

Challenges Hindering Circularity Adoption
There are several key challenges that limit the adoption of circular economy practices in India’s textile sector:

1. Lack of Infrastructure: The absence of large-scale textile recycling facilities and limited access to advanced processing technologies make it difficult for manufacturers to implement circular practices. Additionally, the lack of a waste collection system for post-consumer textiles hinders large-scale recycling efforts.

2. Weak Policy Framework: Unlike the European Union and China, where strict textile recycling mandates exist, India lacks a clear legislative roadmap for CE in the textile industry. The absence of regulations on extended producer responsibility (EPR) means that manufacturers are not held accountable for the end-of-life management of their products.

3. Limited Financial Incentives: Companies receive no tax benefits or subsidies for adopting sustainable textile production models. Implementing CE processes often requires expensive machinery upgrades and R&D investment, which many businesses, especially small and medium enterprises (SMEs), cannot afford.

4. Lack of Training and Awareness: The industry workforce, including designers and manufacturers, lacks the necessary training in circular design principles and sustainable production techniques. Designers must be educated on how to create products using biodegradable or recyclable materials, and manufacturers need training in energy-efficient and waste-reducing techniques.

5. Fragmented Stakeholder Engagement: Coordination among government agencies, private sector players, and research institutions is weak, resulting in ineffective implementation of sustainability initiatives. Many companies operate independently, leading to duplicated efforts and missed opportunities for collaboration.

6. Consumer Behaviour and Awareness: Public perception of fast fashion remains a major barrier. Without strong consumer demand for sustainable clothing, manufacturers and brands have little incentive to switch to circular production models. Large-scale awareness campaigns are needed to educate consumers about the benefits of choosing recycled, upcycled, or ethically sourced textiles.

Opportunities for Circular Economy in Indian Textiles
Despite these challenges, there are several opportunities for integrating CE principles into India’s textile industry:

1. Development of a National CE Roadmap: Establishing a dedicated policy framework for circular textiles, similar to waste management policies in other industries, can provide much-needed direction. The introduction of mandatory textile recycling policies can drive industry-wide compliance.

2. Strengthening Recycling and Waste Management Infrastructure: Investments in textile waste sorting, processing, and fibre regeneration facilities can help scale up circularity efforts. The establishment of textile-specific waste collection centres in urban areas can facilitate systematic material recovery.

3. Introducing Circular Procurement Policies: The government should mandate circular procurement standards, prioritising textiles made from recycled or biodegradable materials. Public sector procurement policies should encourage the use of sustainable textiles in uniforms, furnishing, and other applications.

4. Incentivising Circular Business Models: Offering tax exemptions, subsidies, and grants to companies implementing CE-based production can encourage industry-wide adoption. Startups and SMEs engaged in innovative circular solutions should receive special financial support.

5. Promoting Industry-Academia Collaboration: Universities and technical institutions can play a crucial role in research and workforce training for CE innovations in textiles. The development of dedicated courses in circular fashion design and sustainable textile management can help build a future-ready workforce.

6. Raising Consumer Awareness: Campaigns that educate consumers about sustainable fashion choices, second-hand clothing markets, and upcycling trends can drive demand for circular products. Brands should also take initiative in offering take-back programmes, where consumers can return old garments for recycling.