India’s textile waste holds billions, but inefficiencies block recovery

New Delhi: India generates about 7.25 million tonnes of textile waste annually, but lacks adequate collection, sorting and recycling capacity, resulting in a ₹78,500 crore loss of value each year, according to a report.

If current waste volumes are processed optimally, the same quantity could generate nearly ₹99,800 crore in value, compared to about ₹21,300 crore realized currently, leaving a gap of ₹78,500 crore, the report, prepared jointly by the Federation of Indian Chambers of Commerce & Industry (FICCI) and the Resource Efficiency and Circular Economy Industry Coalition (RECEIC), said.

It emphasized that the material value already exists within the system, but inefficiencies across the value chain prevent its recovery.

RECEIC is an industry-led coalition launched during India’s G20 presidency in 2023 to promote sustainable practices globally.

About 85% of this untapped value lies in reuse options such as resale and upcycling, which remain underdeveloped despite offering the quickest gains.

This assumes significance as India’s textile sector is worth $225 billion and is projected to swell to $350 billion by 2030.

India’s textile waste ecosystem remains highly fragmented, particularly in the post-consumer segment. Nearly 45% of post-consumer waste does not enter recovery pathways and is instead diverted to landfill or incineration, representing a direct loss of material value, the report noted.

The report highlighted structural gaps, noting that India’s textile value chain remains heavily dependent on virgin materials, estimated at around 97%, reflecting limited circularity and low integration of recovered fibres. It also pointed out that collection systems are split across informal networks, municipal channels and limited brand-led initiatives, with no unified national framework guiding material flows.

A major constraint lies in sorting, identified as the “value gate” of the ecosystem, and over 95% of sorting in India is manual, with little use of automation or sensor-based technologies.

The absence of a standardized grading taxonomy further limits the ability to match waste streams with appropriate end-use markets, it added. According to the report, inefficient sorting alone accounts for a significant share of lost value, as materials that could be reused or recycled are often downgraded or discarded due to poor classification.

The study also highlights the absence of a dedicated extended producer responsibility (EPR) framework for textiles, under which producers are responsible for collecting and recycling products after use. Unlike plastics and e-waste, this gap keeps textile makers out of post-consumer waste management. Weak source segregation further worsens the problem, as mixing with other waste contaminates textiles and reduces their recyclability.

Current recovery rates stand at just 25–30%, compared to a potential of up to 85% with proper segregation and system design, the report said.

On the recycling side, India’s ecosystem is dominated by mechanical recycling, which is limited in its ability to process blended fabrics such as cotton-polyester. Chemical recycling capacity remains negligible, constraining the sector’s ability to scale circularity.

The report noted that while India has a strong base in mechanical recycling, it lacks the advanced infrastructure needed to handle complex waste streams and produce high-quality recycled fibres at scale.

Further, the report outlined a set of interventions to unlock the opportunity, including the introduction of a national EPR framework for textiles, investments in collection and sorting infrastructure, development of standardised grading and traceability systems, and expansion of recycling capacity.

It also called for better integration of informal sector workers, who currently handle a significant portion of collection and sorting but remain outside formal supply chains.

Beyond environmental gains, the report argued that circular materials can act as a hedge against supply chain risks, including raw material volatility and rising energy costs. With global brands increasingly demanding traceability and recycled content, strengthening circularity could also improve India’s competitiveness in export markets.