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Indian Experience with EcoIndian Experience with Eco--labeling in Textiles & Prospects labeling in Textiles & Prospects for Textiles with European Ecofor Textiles with European Eco--

labelslabels

CUTS INTERNATIONALCUTS INTERNATIONALIndiaIndia

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Indian Ecolabel Indian Ecolabel -- EcomarkEcomarkEcomark, the Voluntary ecolabel started in Ecomark, the Voluntary ecolabel started in February 1991. February 1991. Ecomark symbol Ecomark symbol ‘‘matkamatka’’ or the earthen potor the earthen pot

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Factors that contributed to the Factors that contributed to the launch of the Schemelaunch of the Scheme

Concern about adverse environmental impact of consumer productsConcern about adverse environmental impact of consumer products, , especially in disposal of garbage. especially in disposal of garbage.

Encouraging sustainable management of resources and ultimately Encouraging sustainable management of resources and ultimately improving the quality of the environment.improving the quality of the environment.

Successful advocacy by consumer bodies. Successful advocacy by consumer bodies.

Political will of the Government. Political will of the Government.

Need for clear and credible guidance regarding products that areNeed for clear and credible guidance regarding products that areenvironment friendly. environment friendly.

NO tradeNO trade related concern was espoused as a factor behind the launch of related concern was espoused as a factor behind the launch of the Scheme! the Scheme!

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Ecomark is similar in many ways to ecolabels of Ecomark is similar in many ways to ecolabels of other countriesother countriesDiffers from most in one important aspect Differs from most in one important aspect ––

Ecolabels in most countries awarded for products Ecolabels in most countries awarded for products that meet primarily the environmental criteria. that meet primarily the environmental criteria. Indian Ecomark awarded for products that meet Indian Ecomark awarded for products that meet both environmental and quality criteria. both environmental and quality criteria.

However, ecolabelling of services that were However, ecolabelling of services that were environmentally friendly, was not considered for environmentally friendly, was not considered for the Indian Ecomark Scheme. the Indian Ecomark Scheme.

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HoweverHowever……Even after 16 years of existence, the Ecomark is not Even after 16 years of existence, the Ecomark is not popular among consumers or the industry. popular among consumers or the industry. Only 12 manufacturers of various products like paper, Only 12 manufacturers of various products like paper, pulp, leather and wood particleboard have till now pulp, leather and wood particleboard have till now applied and received the Ecomark license. applied and received the Ecomark license. Even these licencees hardly use the EcomarkEven these licencees hardly use the Ecomark on their on their package. package. Reasons: Reasons:

No perceptible benefit, according to producers. No perceptible benefit, according to producers. Application process & criteria requirements Application process & criteria requirements cumbersome and difficult. cumbersome and difficult. No consumer demand for such products. No consumer demand for such products.

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Main Objectives of the Ecomark Main Objectives of the Ecomark SchemeScheme

to provide an incentive for manufacturers to reduce to provide an incentive for manufacturers to reduce adverse environmental impact of products; adverse environmental impact of products; to reward genuine initiatives by companies to reduce to reward genuine initiatives by companies to reduce adverse environmental impact of their products and adverse environmental impact of their products and processes; processes; to assist consumers to become environmentally to assist consumers to become environmentally responsible by providing information to take account of responsible by providing information to take account of environmental factors in their purchasing decisions; environmental factors in their purchasing decisions; to encourage citizens to purchase products, which have to encourage citizens to purchase products, which have less harmful environmental impacts; andless harmful environmental impacts; andto improve the quality of the environment and to to improve the quality of the environment and to encourage the sustainable management of resources.encourage the sustainable management of resources.

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16 Product Categories Selected 16 Product Categories Selected for Ecolabellingfor Ecolabelling

Soaps and Detergents, Soaps and Detergents, Plastic Products, Plastic Products, Food Items (such as Food Items (such as edible oils, tea, coffee, edible oils, tea, coffee, baby food, processed baby food, processed foods and beverages), foods and beverages), Paper, Paper, TextilesTextiles, , Food Additives, Food Additives, Cosmetics, Cosmetics, Architectural Paints and Architectural Paints and Powder Coatings,Powder Coatings,

Batteries, Batteries, Lubricating Oils, Lubricating Oils, Packaging Materials, Packaging Materials, Aerosol Propellants, Aerosol Propellants, Pesticides, Insecticides, Pesticides, Insecticides, Biocides and Weedicides, Biocides and Weedicides, Drugs, Drugs, Electrical /Electronic Electrical /Electronic Goods and Goods and Wood substitutes.Wood substitutes.

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Certification RequirementsCertification Requirements

Each product considered for certification Each product considered for certification has to meet two sets of requirementshas to meet two sets of requirements

General requirements common to all product General requirements common to all product categories like compliance with Environment categories like compliance with Environment Protection Act etc.Protection Act etc.Product specific requirements like production Product specific requirements like production process, use of natural resources etc. process, use of natural resources etc.

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ThreeThree--Tiered System for Tiered System for Implementation: Implementation:

Steering CommitteeSteering CommitteeTechnical CommitteeTechnical CommitteeBureau of Indian StandardsBureau of Indian Standards (BIS) (BIS)

Problems:Problems:Too bureaucratic Too bureaucratic Two consumer groups in the steering and the Two consumer groups in the steering and the technical committees, but technical committees, but no environmental no environmental group.group.

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Complex Process of the Complex Process of the Ecomark SchemeEcomark Scheme

Steering Committee initially decides the category Steering Committee initially decides the category of products for coverage under the Scheme. of products for coverage under the Scheme. Then Technical Committee or subThen Technical Committee or sub--committees committees set up by the Technical Committee develop the set up by the Technical Committee develop the desired criteria. desired criteria. The draft criteria is placed before the Steering The draft criteria is placed before the Steering Committee for comments. Committee for comments. The comments are sent back to the Technical The comments are sent back to the Technical Committee. Committee.

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Complex ProcessComplex Process……The draft is then sent to the Steering Committee The draft is then sent to the Steering Committee who notify it for public comments. who notify it for public comments. Technical Committee includes these comments Technical Committee includes these comments and finalises the criteria. and finalises the criteria. The criteria is then returned to Steering The criteria is then returned to Steering Committee for final notification. Committee for final notification. The BIS, subsequently, translates the product The BIS, subsequently, translates the product specific specifications into Indian Standards for specific specifications into Indian Standards for the Ecomark certification.the Ecomark certification.

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CUTS has put forward few policy CUTS has put forward few policy recommendations: recommendations:

(Refer Mehta, Pradeep S (2006), Why was India(Refer Mehta, Pradeep S (2006), Why was India’’s Ecomark s Ecomark Scheme Unsuccessful?, Accessible at: www.cutsScheme Unsuccessful?, Accessible at: www.cuts--

citee.org/PDF/060909IES.pdf )citee.org/PDF/060909IES.pdf )

Need for a new, independent board with an Need for a new, independent board with an advisory structure comprising of consumer, advisory structure comprising of consumer, environmental and business groups. environmental and business groups. Need for a reduction and prioritisation of the Need for a reduction and prioritisation of the number of selected product categories. number of selected product categories. Product categories chosen should be based on Product categories chosen should be based on certain measurable parameters such as certain measurable parameters such as maximum adverse environmental impact and maximum adverse environmental impact and high nationalhigh national consumption. consumption.

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CUTS RecommendationsCUTS Recommendations……

Scheme needs to be made more dynamic and Scheme needs to be made more dynamic and forward looking by periodic revisions of criteria forward looking by periodic revisions of criteria through wide stakeholder consultations.through wide stakeholder consultations.Domestic as well as international requirements Domestic as well as international requirements on labels need to be balanced while setting a on labels need to be balanced while setting a feasible criteria. (Mutual Recognition and feasible criteria. (Mutual Recognition and Equivalence of criteria)Equivalence of criteria)Need for an effective National Awareness Need for an effective National Awareness Campaign about the scheme. Campaign about the scheme.

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Textiles and Clothing (T&C) Textiles and Clothing (T&C) Industry in IndiaIndustry in India & &

EcolabelsEcolabels

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Few FactsFew Facts

Textile industry has an overwhelming Textile industry has an overwhelming presence in the economic life of the presence in the economic life of the country. country. Second largest provider of employment Second largest provider of employment after agriculture. after agriculture. Contributes about 14 percent to industrial Contributes about 14 percent to industrial production, 4 percent to the GDP, and 17 production, 4 percent to the GDP, and 17 percent to the countrypercent to the country’’s export earnings. s export earnings.

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Few FactsFew Facts

Direct employment to about 35 million people. Direct employment to about 35 million people. Majority includes women and economically and Majority includes women and economically and socially backward sections of the community. socially backward sections of the community.

Hence, growth and all round development of Hence, growth and all round development of textile sector has a direct bearing on the textile sector has a direct bearing on the improvement of the economy of the country as a improvement of the economy of the country as a whole. whole.

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ProspectsProspects

The Indian textile industry is projected to The Indian textile industry is projected to grow from US$ 47 billion in the year 2005grow from US$ 47 billion in the year 2005--2006 to US$ 115 billion by the year 2012, 2006 to US$ 115 billion by the year 2012, comprising domestic market of US$ 60 comprising domestic market of US$ 60 billion and exports of US$ 55 billion.billion and exports of US$ 55 billion.Projected growth rate is 16% per annum. Projected growth rate is 16% per annum.

Source: Ministry of textiles, India

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Targets as per the 5Targets as per the 5--year plan of year plan of Government: Government:

UpUp--gradation of the technology of the industry for gradation of the technology of the industry for achieving a growth of the textile economy from the achieving a growth of the textile economy from the current $ 37 billion to $ 85 billion by 2010; current $ 37 billion to $ 85 billion by 2010; Creation of supportive environment for facilitating Creation of supportive environment for facilitating massive investment in the sector and thereby creating massive investment in the sector and thereby creating 12 million additional jobs in Textile Sector; 12 million additional jobs in Textile Sector; Increasing IndiaIncreasing India’’s share in world textile trade from the s share in world textile trade from the current 4% to 8% by 2010 and achieving export value of current 4% to 8% by 2010 and achieving export value of $ 50 billion by 2010; $ 50 billion by 2010; Expediting the process of modernisation and Expediting the process of modernisation and consolidation for creating a globally competitive industry; consolidation for creating a globally competitive industry;

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IndiaIndia’’s Experience with European s Experience with European Ecolabels: Ecolabels:

To address the demands and concerns of To address the demands and concerns of the developed country markets. the developed country markets. OekoOeko-- textex the most popular label in Indiathe most popular label in IndiaFirst two companies in India to acquire First two companies in India to acquire OekoOeko--textex ecolabel: ecolabel:

Century Textiles and Industries obtained Century Textiles and Industries obtained OekoOeko--tex label in January 1995. tex label in January 1995. Aravind Mills received the label for denim Aravind Mills received the label for denim cloth in the same year. cloth in the same year.

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Experience of Century Textiles and Experience of Century Textiles and Industries with Industries with OekoOeko--Tex Tex

Negative side: Negative side: Meeting the requirements of OekoMeeting the requirements of Oeko--tex was tex was difficult though the direct cost borne by the difficult though the direct cost borne by the company for company for ““OekoOeko--textex”” certification was certification was less than Rs 93,110 (US$2,000). less than Rs 93,110 (US$2,000). Had to Source alternative dyes, Had to Source alternative dyes, reformulating recipes, checking quality, reformulating recipes, checking quality, testing amines and retraining mill workers. testing amines and retraining mill workers.

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Experience of Century Textiles Experience of Century Textiles With With OekoOeko-- TexTex

Positive side:Positive side:Substitution exercise led to optimisation of the Substitution exercise led to optimisation of the dyeing recipe so that a 10 to 15 percent cost dyeing recipe so that a 10 to 15 percent cost increase in most of the shades was offset by a increase in most of the shades was offset by a 20 to 30 percent cost saving in two of the most 20 to 30 percent cost saving in two of the most popular colours. popular colours. The company received higher price for their The company received higher price for their products . products . Markets widened by 10 percent in the first year Markets widened by 10 percent in the first year alone. alone.

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OekoOeko--tex scheme offers a range tex scheme offers a range of benefits: of benefits:

Enhanced export market opportunitiesEnhanced export market opportunitiesImproved product quality Improved product quality Financial savings Financial savings Improved environmental performance Improved environmental performance Providing a step towards ISO 14001 and Providing a step towards ISO 14001 and ISO 9000 ISO 9000

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Current status of Current status of OekoOeko-- Tex in Tex in IndiaIndia

Seeing the benefits and due to buyer Seeing the benefits and due to buyer demands, Indian companies have taken demands, Indian companies have taken keen interest in keen interest in OekoOeko--Tex. Tex.

As on As on 26 June 2007, there are 274 26 June 2007, there are 274 manufacturer with Oekomanufacturer with Oeko--textex certificates.certificates.

Most of these are based in the South India Most of these are based in the South India and export to Germany.and export to Germany.

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Marketing Potential of Textiles withMarketing Potential of Textiles withEuropean EcolabelsEuropean Ecolabels

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Marketing Potentials of Textiles Marketing Potentials of Textiles Ecolabelled with European Ecolabels: Ecolabelled with European Ecolabels:

Some factsSome facts

America and Europe have registered high growth rates in imports to the tune of 33.69 per cent and 23.73 per cent, respectively, in 2005.

Exports of textiles/ world-wide

Between 1962 and 2004, global trade in textiles increased from $6 billion per year to over $450 billion. The biggest markets for textiles world-wide are in the USA, Europe and China.

Textiles / world-wide

Market potentialProduct / Countries

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Market Potential: European Market Potential: European Market Market Source: Eurostat , in Source: Eurostat , in million eurosmillion euros

--35.64335.643--31.80231.802--29.59629.596--27.95627.956BalanceBalance35.79735.79735.51835.51834.50334.50336.23536.235ExportsExports

71.4471.4467.3267.3264.09964.09964.19164.191ImportsImports20052005200420042003200320022002

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IndiaIndia’’s Exports to the World and EU s Exports to the World and EU (Source: India Trades data base, CMIE, Mumbai)(Source: India Trades data base, CMIE, Mumbai)

38.6217138.62171287487528748757443675744367536.4871736.487172323349232334963675796367579TotalTotal40.1931140.19311421115.1421115.11047729104772940.3926740.39267334739.2334739.2828712.9828712.9636341.2240541.224059179849179842226817222681737.21237.212631243.5631243.516963441696344626255.0197155.01971730612.9730612.91327911132791153.224753.2247626973.8626973.811779751177975616120.234820.23483948.343948.3419512.6219512.6227.1227827.122785609.455609.4520681.6920681.696060

22.7720922.772098204.248204.2436027.6136027.6135.1122635.1122611718.9311718.9333375.6133375.615959

42.6259642.6259626892.8726892.8763090.3663090.3634.0689734.0689717175.1317175.1350412.8350412.835858

44.0518644.05186203882.2203882.246282346282343.9042543.90425158251.3158251.3360446.3360446.35757

26.4172126.417219067.289067.2834323.3834323.3822.1134522.113455177.595177.5923413.7623413.765656

30.5171430.51714110560.3110560.3362289.2362289.234.842634.8426122296.5122296.53509973509975555

16.7062216.7062270544.7570544.75422266.5422266.513.9623713.9623760460.5460460.544330254330255454

37.0430437.0430428523.5628523.5677001.1377001.1346.0885546.0885534243.2534243.2574298.8374298.835353

22.4773822.47738258340.6258340.61149336114933621.5398421.53984241003.1241003.1111887111188715252

44.7537244.7537216373.7816373.7836586.4136586.4149.7562649.7562614639.4614639.4629422.3529422.355151

38.67438.67468824.9368824.93177961.7177961.735.2693435.2693459817.6259817.62169602.3169602.35050

20052005200520052004200420042004

% Share% ShareEU(15)EU(15)World World % Share% ShareEU(15)EU(15)World World HSHS

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Country Share in Top five commodities of Country Share in Top five commodities of Export, 2005Export, 2005

76.085936 76.085936 37.332427 37.332427 38.753509 38.753509 630790 630790

81.268947 81.268947 38.161415 38.161415 43.107532 43.107532 620520 620520

80.113858 80.113858 37.241061 37.241061 42.872797 42.872797 630492 630492

81.331195 81.331195 43.022256 43.022256 38.30894 38.30894 620630 620630

80.011893 80.011893 55.589772 55.589772 24.422122 24.422122 610910 610910

TotalTotal% EU(15)% EU(15)% USA% USAHS CodeHS Code

Source: India Trades data base, CMIE, MumbaiSource: India Trades data base, CMIE, Mumbai

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In many important items of Indian exports, In many important items of Indian exports, especially finished products, the EU is and especially finished products, the EU is and will remain the major market.will remain the major market.Market access and recognition by the Market access and recognition by the consumers will be important in India consumers will be important in India achieving its export goals.achieving its export goals.

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EU Market PotentialEU Market PotentialEU 25 T&C imports are increasing, while EU 25 T&C imports are increasing, while exports have stagnated.exports have stagnated.Ecolabels could impact 15 percent of the EU Ecolabels could impact 15 percent of the EU

domestic market.domestic market.Ecolabels can ensure market access and Ecolabels can ensure market access and acceptance.acceptance.Ecolabels can result in long term economic Ecolabels can result in long term economic dividend for firms by reducing input costs like dividend for firms by reducing input costs like energy, better raw materials, safety of workers energy, better raw materials, safety of workers etc. etc.

However, which ecolabel is to be preferred?However, which ecolabel is to be preferred?

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Which Ecolabel?Which Ecolabel?

As of now As of now OekoOeko--textex is popular, especially is popular, especially targeting buyers from Germany.targeting buyers from Germany.In future, a EUIn future, a EU--wide label like wide label like ‘‘EU FlowerEU Flower’’would be better, as it will have wider would be better, as it will have wider acceptance in Green procurement acceptance in Green procurement schemes of Governments, schemes of Governments, The EU FlowerThe EU Flower’’s comprehensive criteria s comprehensive criteria can better the domestic environment well.can better the domestic environment well.EgEg. Emphasis on effluents. Emphasis on effluents

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HoweverHowever……

The EU Flower is not popular even in the The EU Flower is not popular even in the EU. Desirability depends on uncertain EU. Desirability depends on uncertain future activities by the EUfuture activities by the EU-- need for clarity.need for clarity.More awareness creation and informed More awareness creation and informed choice, and not the present form of herdchoice, and not the present form of herd--behavior while applying for a label.behavior while applying for a label.Indian firms would need assistance, both Indian firms would need assistance, both technical and financial.technical and financial.

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Thank You!Thank You!