New Delhi: India generates about 7.25 million tonnes of textile waste annually, but lacks adequate capacity to collect, sort and recycle it, resulting in $9.4 billion in lost value every year, according to a report.
If current volumes of waste are treated optimally, almost the same amount can be generated ₹99,800 crore in value, compared to approx ₹Currently, 21,300 million crowns are implemented, which leaves a gap ₹78,500 crore, according to a report jointly prepared by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Industry Coalition for Resource Efficiency and Circular Economy (RECEIC).
He emphasized that material value already exists in the system, but inefficiencies across the value chain prevent its recovery.
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RECEIC is an industry-led coalition launched during India’s G20 Presidency in 2023 to promote sustainable practices globally.
About 85% of this unused value lies in reuse options such as resale and upcycling, which remain underdeveloped despite offering the fastest returns.
This assumes significance as India’s textile sector is worth US$225 billion and is projected to grow to US$350 billion by 2030.
The textile waste ecosystem in India remains highly fragmented, especially in the consumer segment. Almost 45% of post-consumer waste does not enter recovery routes and is instead diverted to landfill or incineration, representing a direct loss of material value, the report says.
“The $9.4 billion loss reported by FICCI proves that the ‘take-make-dispose’ model of fast fashion is both an economic failure and an environmental disaster. We are burying wealth in landfills because our infrastructure cannot handle the increase in oil-based ‘perpetual waste’ that is non-recyclable and persists for centuries, Satat Foundation Director, Harpadingalimateh and Climate. said.
“To block this leakage, India needs to go back to cotton and biodegradable fabrics. Replacing synthetic materials with natural fibers will turn this multi-billion dollar loss into a win for our farmers, our artisans, our economy and the planet.”
The report highlighted structural gaps and noted that India’s textile value chain remains heavily dependent on virgin materials, estimated at around 97%, reflecting limited circulation and low integration of recycled fibres. He also highlighted that collection systems are fragmented into informal networks, communal channels and limited brand-led initiatives, with no unified national framework to manage material flows.
The main limitation lies in sorting, which is identified as the “gateway of value” of the ecosystem, and more than 95% of sorting in India is manual, with little use of automation or sensor-based technologies.
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The lack of a standardized classification taxonomy further limits the ability to match waste streams with appropriate end-use markets, he added. According to the report, inefficient sorting itself is a significant contributor to the loss of value, as materials that could be reused or recycled are often degraded or discarded due to misclassification.
The study also highlights the absence of a dedicated extended producer responsibility (EPR) framework for textiles, under which manufacturers are responsible for the collection and recycling of products after use. Unlike plastics and e-waste, this loophole prevents textile manufacturers from managing post-consumer waste. Poor source segregation further exacerbates the problem, as mixing with other waste contaminates textiles and reduces their recyclability.
Current recovery rates are only 25-30%, compared to the potential of up to 85% with proper separation and system design, the report said.
On the recycling side, the Indian 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, limiting the industry’s ability to scale circulation.
The report says that while India has a strong base in mechanical recycling, it lacks the advanced infrastructure needed to process complex waste streams and produce high-quality recycled fibers on a large scale.
Furthermore, the report outlined a set of interventions to unlock this opportunity, including the introduction of a national EPR framework for textiles, investment in collection and sorting infrastructure, development of standardized sorting and traceability systems and expansion of recycling capacity.
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He also called for better integration of informal sector workers, who currently provide a significant part of collection and sorting but remain outside formal supply chains.
In addition to the environmental benefits, the report argued that circular materials can act as a hedge against supply chain risks, including the volatility of raw materials and rising energy costs. As global brands increasingly demand traceability and recycled content, enhancing circularity could also improve India’s competitiveness in export markets.
