New EU rules may restrict textiles and footwear exports

The most recent ecodesign rule from the European Union (EU), which aims to enforce strict sustainability standards among its member states, is predicted to have a major effect on India’s exports of textiles and shoes. The legislation, which mandates strict energy performance and environmental sustainability, also forbids the disposal of unsold footwear and textiles, which may limit the amount of orders that Indian exporters may place.

The new regulations, which mirror larger efforts to limit environmental harm across the product life cycle, require products to fulfil minimum requirements for energy efficiency and environmental effect. The regulation includes measures related to product longevity, product reusability, and energy efficiency. These are supplemented by programmes such as the carbon border adjustment mechanism (CBAM) and rules against deforestation.

Industry experts cited in the research state that smaller businesses in particular face difficulties in adhering to the strict ESG (environmental, social, and governance) criteria. There are worries that the rules, which are thought of as non-tariff obstacles, would counteract the advantages of tariff reductions that are being pursued in current free trade negotiations.

Industry stakeholders view the interim exemptions granted to small and medium-sized businesses from certain sections of the law as insufficient. The EU’s ecodesign regulations include a wide range of products, however some products are noticeably excluded, including vehicles and defence and security-related goods.

The rule specifies standards for materials that promote circularity, durability, reusability, upgradability, reparability, and limits them. It also specifies energy efficiency, recycled materials, remanufacturing, and recycling regulations.

In addition, the regulation requires information sharing through the Digital Product Passport and adds requirements for carbon and environmental impact evaluations. In order to encourage the purchase of environmentally friendly goods, it also incorporates eco design concepts into public procurement regulations.

In conclusion, the EU’s ecodesign regulation’s wider effects on international trade highlight the necessity of strategic engagement and adaptation within global supply chains, even while the temporary exceptions for SMEs provide some relief.