New EU rules may restrict textiles and footwear exports

Ecodesign regulation mandates rigorous energy performance and environmental sustainability, potentially impacting India’s export volumes

The European Union’s (EU) latest ecodesign regulation, aimed at enforcing stringent sustainability criteria across its member states, is expected to significantly impact the export of textiles and footwear from India. Mandating rigorous energy performance and environmental sustainability, the regulation includes provisions that prohibit the disposal of unsold textiles and footwear, potentially constraining order volumes for Indian exporters, as per reports.

The new rules require products to meet minimum standards for energy efficiency and environmental impact, reflecting broader efforts to mitigate environmental harm throughout the product life cycle. Measures under the regulation encompass product durability, reusability, and energy efficiency, complemented by initiatives like the carbon border adjustment mechanism (CBAM) and anti-deforestation regulations.

According to industry experts cited in the report, including Mithleshwar Thakur from the Apparel Export Promotion Council, the adaptation to these stringent ESG (environmental, social, and governance) standards poses challenges, particularly for smaller enterprises. Concerns have been raised that the regulations, perceived as non-tariff barriers, could undermine the benefits of tariff reductions sought through ongoing free trade negotiations.

While small and medium enterprises have received temporary exemptions from some aspects of the regulation, these exemptions are seen as insufficient by industry stakeholders. The EU’s ecodesign standards encompass a broad spectrum of products, with notable exclusions such as automobiles, defense, and security-related items. The regulation outlines criteria for durability, reusability, upgradability, reparability, and restricts substances hindering circularity, alongside requirements for energy efficiency, recycled materials, remanufacturing, and recycling.

Moreover, the regulation introduces provisions for carbon and environmental impact assessments and mandates information disclosure through the Digital Product Passport. It also integrates eco design principles into public procurement policies to promote the acquisition of eco-friendly products.

In conclusion, while temporary exclusions for SMEs offer some reprieve, the broader implications of the EU’s ecodesign regulation on international trade underscore the need for strategic engagement and adaptation within global supply chains.