Impact-Driven Investments Are Transforming India's Textile Belt into a Global Sustainability Hub

India's textile sector has long been a cornerstone of its economy. Long known for scale and low cost, the sector is now repositioning itself as a global hub for sustainable production. The government's ambition is clear: triple the industry's value to USD 350 billion by 2030 while reducing emissions by half. But as many analysts and journalists note (see "Can India triple the value of its fashion sector while halving emissions?" by Brooke-Roberts Islam), ambition alone doesn't guarantee alignment with climate goals.

- By Jayanth Kashyap B, Investment Lead, Good Fashion Fund

The transition depends on how capital is deployed and whether that capital is structured to deliver real, measurable transformation in a just manner at the place needing the most support — the factories.

Growth and the Coal Dilemma

India's PM MITRA mega-parks are targeted at integrated infrastructure and global competitiveness. Yet across the textile belt—from major hubs like Surat and Tiruppur to other emerging industrial clusters such as Karur, Erode, Panipat, and Ichalkaranji—coal-fired boilers remain central to heat-intensive processes like dyeing, washing, and finishing.

Coal accounts for around 1% of the textile sector's total energy mix, yet it fuels over 50% of the thermal energy used in wet processing, according to the Apparel Impact Institute. Cleaner alternatives (e.g., electric boilers or thermal recovery) exist, but adoption remains limited by high upfront costs and fuel constraints. For many SMEs, the transition is technically feasible but financially inaccessible without targeted support. This is where capital and brand alignment become catalytic. When brands embed sustainability into sourcing, and when investors offer structured tools—not grants—SMEs gain a viable path to transition. The greater risk is locking in legacy emissions, building modern infrastructure that runs against the principles of a transition.

Impact Investments Are Already Here