An Apparel Impact Institute (AII) report names India—one of the world’s largest apparel manufacturers—as a crucial region for impactful decarbonisation interventions with $2.5 billion funding already available, and an estimated $4 billion required further to reduce the country’s total industry emissions by 45% by 2030 through renewable energy and energy efficiency interventions.
Significant investment in renewable energy and energy efficiency interventions are required to reduce the absolute emissions of the fashion industry by 50% by 2030, the target set forth by the Fashion Industry Charter for Climate Change (FICC), which is operated under the United Nations Climate Change Secretariat.
THE REPORT: Brought out in collaboration with Development Finance International Inc (DFI) and with support from HSBC, the report Landscape and Opportunities to Finance the Decarbonization of India’s Apparel Manufacturing Sector, outlines solutions for mobilising sustainable financing to support the decarbonisation of India’s textile and apparel industry.
It names India, one of the world’s largest apparel manufacturers, as a crucial region for impactful decarbonisation interventions, with $6.5 billion required in India alone to achieve the industry’s emissions reduction target.
As countries reflect on their pathways to meeting NDCs in the lead up to COP29, the report outlines immediate actions for policymakers, financiers, and the industry value chain to support ongoing energy efficiency and renewable energy efforts in the country.
According to the report:
- An estimated $6.5 billion in financing is required to reduce India’s total industry emissions by 45% by 2030 through renewable energy and energy efficiency interventions.
- While approximately $2.5 billion is available, there is still a $4 billion financing gap.
- India boasts a well-established market of energy efficiency service companies, positioning the country to rapidly accelerate its decarbonisation efforts.
- Increasing accessible funding—particularly in the realm of blended finance—can make decarbonisation investments more affordable and can help manufacturers overcome sustainability transitions challenges, including risk constraints, unfavourable financing and limited infrastructure.
- Encouragingly, the report identifies at least $1.3 billion in readily available financing from credit lines and revolving funding schemes and estimates an additional $1.2 billion already being developed by international financing institutions, governments, and NGOs.
- The report identifies six critical interventions, including mobilising capital with swift urgency and collaborating across the entire value chain.
THE CONTEXT: Representing 13% of total industrial output, India represents one of the apparel and footwear industry’s most important frontiers for decarbonisation to keep global warming within the necessary 1.5°C range.
WHAT THEY SAID:
This report goes beyond exploring renewable energy and energy efficiency in India’s apparel sector –- it provides a clear path forward and offers practical guidance to close the climate finance gap and ensure proven decarbonization solutions receive the critical funding they need. Aii plays a crucial role in connecting our industry’s stakeholders – the report’s findings on India’s capital potential are encouraging as we continue our work in helping brands, manufacturers and international finance institutions accelerate the uptake of decarbonization efforts across global manufacturing hubs.
— Lewis Perkins
President
Apparel Impact Institute
As India’s apparel sector plays a pivotal role in global supply chains, decarbonizing its operations is not only essential for meeting climate goals but also for securing the future competitiveness of the industry. We are pleased to have worked with Aii on this report to outline how stakeholders can work together to accelerate the transition to a low-carbon apparel industry.
— Emilio Bunge
President / CEO
Development Finance International Inc
