Varun Vaid from Wazir Advisors delivered a compelling presentation at the Sustainability event held at PHD House, New Delhi, on September 17th, 2024. He provided valuable insights into the current state of the global textile industry, offering actionable intelligence for industry professionals.
Global textile industry, including India, then a little bit on the need for sustainability and then addressing the industry emission and abatement strategies for which I would like to invite from finance consulting to take up and then way forward for the U. S. stakeholders.
It is valued at almost 1. And this is the apparel fashion consumption at the retail level across all the countries. So we look at here, the chart that is in front of us, the maximum consumption of apparel fashion is in the countries of US almost 290 billion, followed closely by the EU 267 billion. Then we have China, which is at 181 billion followed by India, Japan, and so on.
So, this industry has been growing in the past at a nominal growth rate of 3 to 4 percent, and going forward, it is expected that the consumption will continue to move and will touch somewhere around 2. 2 to 2. 2030. So that means that in the next 6 7 years, there is an additional market of almost 40 percent of the level that we are standing to.
So from a sustainability perspective, what we are trying to say is that we are going to consume 1. 5 times even if we Take account of the inflation, et cetera. So we're almost going to have 1.2 times the volumes that are required today on an annual basis. So like you mentioned, how the dates are shifting from December to August 1st.
So definitely it'll have bearing only consumption of the resources that are available today. If you talk about India's textile apparel industry, uh, in Indian context, definitely takes the power industry as one of the most important industries. So if you look at the economic contribution, it's contributing almost 2%.-2.3% to India's GDP.
We also contribute 10 to 12% of India's overall exports. We are the second largest employer just after agriculture, employing almost 5.5 car people directly. And mind you, there are far more people which are employed indirectly, logistics people. So they are, there are so many ancillary industries which are working for, in the textile industry, manufacturing.
So that is also there. One important part of this industry is that it can also employ the economic weaker section and even women for that matter in the rural part of the country, the youth in the rural part of the country can be trained in a shortest possible time to be part of the formal sector.
So that's the, I would say, a USP industry, which the government has recognized and been pushing for investment and exports and all those things in the textile industry.
We are, of course, one of the largest exporter of textile and apparel. We are, exports are around 35 to 37 billion dollars annually. And this is one of the few sectors where our trade deficit is positive. So we are exporting more than what we are importing, unlike many of the other larger sectors. We also are present across the value chain.
You talk about fiber, yarn, fabric, garments, home textiles, technical textiles. You think about any of the products. The probability is that we are already manufacturing that either for domestic consumption or for export to India. We are also the largest producers of several fibres, cotton, and jute are the largest produced here.
We are also a significant, second largest producer of polyester filament and several other, uh, man-made fibres (MMF), even silk for that matter, and viscose cable fibre. But, there is a challenge also, which people are talking, again, about. on a very regular basis is the sustainability-related challenge. So if we see that, and this is not for the Indian textile industry, this slide is talking about the global textile industry.
The PR is also credited to be the second largest water polluter in the world. 20 percent of the worldwide industry water pollution is contributed to, contributed by the textile repair industry. 9 percent of microplastic pollution, And almost 92. 6 billion cubic meters of water is consumed annually. That's almost to the demand of 5 million people.
In terms of chemicals, almost quarter of chemicals produced globally are used by the textile and cotton industry. And in greenhouse gases, 5 to 10 percent contribution come from the textile and cotton industries. Now while the statistics are there, they have been there in circulation for a long. We have to take it with a pinch of salt.
Why I am saying so is that some of these numbers, while this number is not there, but for example, people talk about that there is a need for 20, 000 liter of water to grow 1 kg of cotton. Now this study was done about 20 years ago by World Bank or somebody and since then a lot of things have changed whether in farm practices, whether in industrial technology and so and so forth.
Right now the situation is the latest, if you do the LCA, the water consumption is only 2000 liters. If you're going for irrigated land, if you go for, if you go for the rain effect, the requirement is again, one-third, 6,000 liters only, and that is also transient. What is happening is that 6,000 water goes into the ground and the crop is only taking the transit.
It's again, evaporating. So what we are saying, what I'm trying to say is that the industry has been placed at the pinnacle of pollution in all the, you know, among all the industries. But this is also the time that we as industry stakeholders look into the facts and also challenge these numbers and also do a kind of a related new, uh, understanding and new studies to understand whether this is the right situation or not.
This does not mean that we should not be focusing on sustainability measures, but we have to set the house in order. First of all, the image also of the textile industry has to be improved among the buyers, among the consumers. And maybe, you know, like if you talk about greenhouse gases, aviation is far more, uh, polluting industry in, uh, in terms of the greenhouse gases.
But in terms of textile, we need to look at what we can do when we are trying to improve it, but also we need to set the baseline, you know. If you look at, this is something that is very much alarming and there is no question on that. So, Entire crop, entire fiber which is being produced, almost we use 110 million kg of fiber annually globally, less than 1 percent of that fiber enters into the recycling system.
So when we, we close the loop, that means that it is used again to make textile for consumption. So if you look at the entire thing, twisted garland only are 27 percent which means you buy second and the rest is oil. So, we have a process of getting the new clothing which is there and then it enters the landfill.
From there, 20 percent enters in the landfill and 80 percent goes for recycling, which is less than 1 percent is recycling, 5 percent in landfill, 20 percent scrap. So, all these numbers come to a scenario where maximum utilization is for the new clothes and they are being dumped without any further end-of-life solutions to it.
Now, this 1 percent number has to grow up to I think, uh, it was mentioned earlier that China aims to do 25 percent of textiles recycling. So that's a big number. And that's the target that globally every brand or every, uh, buyer would be looking into. There are several barriers to recycling. The circularity, as we say, there are several barriers.
First of all, fast fashion. The consumption of youth, uh, in terms of the per capita pieces, et cetera, has grown very rapidly. So it's smaller, smaller valued prices and higher consumption, higher volumes which is coming. The price sensitivity is also high. So for recycling, we know that a lot of technology is required.
So, at this moment, the economy may not work out. There are challenges in recycling blended fabrics. So there are parts which are talking about, there's something what is called as designing for recycling. So during the designing phase of the product, you think about how it will not end up in the landfill and can it be recycled.
So you don't use buttons which are very different from the fibers. So that recycling becomes easy. You don't use a sewing thread that cannot be recycled. You don't use metal buttons with fabric. So these are things that are going on globally, but these are some of the right challenges, right there.
Then also because of the large portion of SMEs involved in the value chain, there is no complete transparency. There is inefficiency I would say in, in the traceability of the material. Five years down the line, the labels will be worn off. There will be no what is there in the fabric. So it becomes very difficult for, you know, getting into the supply.
Again, from a technical perspective, and also a technological perspective, high-quality recycling has not been scaled up so far. So efforts are going on in silos and general countries. And India is doing a lot of recycling. Palipur is well known for recycling a certain part of the value chain.
But then there are challenges. The technology also needs to develop, maybe next couple of years, five years down the line, it should happen.
And of course, one of the last point is that sustainability is yet not the most important decision. So whenever we think about the cost of the company, we are not thinking about the cost to the planet or the cost to the people. So those drivers are not yet in the place and these are changing very rapidly.
Like, you know, if you look at the thrifting stores have popped up everywhere in Europe and the US and many of the youngsters are not even buying new clothes. So they are finding these thrifting stores and there, there's a lot of increase in the sales of those stores. So that can happen everywhere and it will be percolated down into emerging countries as well.