The European Union’s (EU) latest ecodesign regulation, aimed at enforcing stringent sustainability standards across member states, is expected to significantly impact India’s textile and footwear exports. The legislation mandates strict energy performance and environmental sustainability standards, including a ban on disposing of unsold footwear and textiles, potentially limiting the number of orders Indian exporters can receive.

These new regulations, part of broader efforts to minimize environmental damage throughout product lifecycles, require products to meet minimum energy efficiency and environmental impact criteria. The regulation encompasses measures related to product longevity, reusability, and energy efficiency, supplemented by initiatives like the Carbon Border Adjustment Mechanism (CBAM) and anti-deforestation rules.

Industry experts note that smaller businesses may struggle to comply with the stringent environmental, social, and governance (ESG) criteria. There are concerns that these regulations, seen as non-tariff barriers, might offset the benefits of tariff reductions being negotiated in current free trade agreements.