India needs $6.5 billion funds to reduce carbon emissions by 45 per cent in the textile and apparel sector by 2030, as per a recent report from the Apparel Impact Institute (Aii) and Development Finance International Inc (DFI).
As per the report, India currently has funds worth $2.5 billion. However, it still requires substantial financingworth $4 billion. Titled,‘Landscape and Opportunities to Finance the Decarbonisation of India’s Apparel Manufacturing Sector,’ the report has been developed in collaboration with HSBC.
India’s position as one of the world’s largest apparel producers makes it a key target for effective decarbonisation, aligning with global climate goals set by the Fashion Industry Charter for Climate Change, led by the United Nations. The charter aims to reduce absolute emissions by 50 per cent by 2030, requiring a combination of renewable energy and energy efficiency initiatives.
Outlining the available financial resources, the report reveals, India currently has $1.3 billion funds from credit lines and revolving funding schemes.It anticipates an additional $1.2 billion funds from International Financing Institutions, governments, and NGOs. It identifies six essential interventions to bridge the financing gap, emphasising urgent capital mobilisation and collaboration across the apparel value chain.
Emphasising on the report’s practical approach, Lewis Perkins, President, Aii, says, this report provides a clear path forward to close the climate finance gap and ensure decarbonisation solutions receive critical funding.
Noting the importance of decarbonising Indian apparel industry, Emilio Bunge, President and CEO, DFI, highlight its significance in the global supply chain and future competitiveness.
India’s established energy efficiency market positions it well for rapid decarbonisation. However, the report emphasises on the need for increased access to funding, particularly through blended finance models, to make these investments more feasible. Expanding accessible finance can help manufacturers tackle sustainability challenges, including risk constraints, financing difficulties, and infrastructure limitations.
The report urges policymakers, financiers, and industry stakeholders to take urgent action to boost India’s energy efficiency and renewable energy initiatives, emphasising the apparel sector’s essential role in achieving both national and global climate targets.
