Multiple statistics show India’s denim market is booming. With an impressive average annual growth rate of 8 to 9%, the domestic denim market is anticipated to touch $9.15 billion by 2026, growing from $6.15 billion in FY2023. At almost 1,600 million metres, the country holds the second-largest global installed denim fabric capacity. While one billion metres of denim are used domestically, the balance is exported. By 2027, India’s denim exports are anticipated to touch 650-700 million metres. As per Textile Insights, given its market share of 11%, India is the world’s third-largest exporter of denim fabric, after China and Pakistan.
An Overview of Denim Industry Challenges
Though these numbers paint an extremely rosy picture, India’s denim manufacturers are facing varied challenges that are impacting margins. Beneath its chic façade lies a complex chain of sustainability and operational challenges that require immediate attention for denim manufacturers to maintain their market presence and viability. Be it water-intensive production processes or its use of chemicals, the denim industry is facing a range of issues that manufacturers are working to address on a war footing to meet global ESG (environmental, social and governance) norms.
Pressure from fast fashion trends, budget-conscious customers, as well as growing cost competition from neighbouring nations, along with the need to switch to sustainable practices, has ensured denim producers have predefined tasks in meeting industry challenges. As a result, denim makers have been undertaking a series of measures to ensure they retain market share, relevance and competitiveness.
That an enduring fabric should face sustainability issues is somewhat ironic. Sustainability and other challenges require some elaboration. A Levi Strauss & Co. report revealed that 3,781 litres of water are used in producing a single pair of its 501 jeans. This involves the water needed for growing cotton as well as fabric processing, including the dyeing and washing stages.
Estimates indicate global cotton production consumes 222 billion cubic metres of water each year. In India, producing one kilo of cotton (the main raw material in denim) requires 22,500 litres of water on average, according to the Water Footprint Network’s research. Garment manufacturing activities contribute to around 20% of the industrial water pollution and 85% of this is due to dyeing processes alone, consuming an annual 1.3 trillion gallons, notes Cotton, Inc. Harmful chemicals and finishing agents only exacerbate the problem. Intensive energy consumption poses another threat, especially during the spinning, weaving and fabric finishing periods. The use of fossil fuels for most of this energy only adds to air pollution and greenhouse gas emissions.
Decoding Some Embedded Opportunities
Nonetheless, these challenges also hold embedded opportunities for manufacturers to comply with the latest sustainability practices enhance their brand image and attract environmentally conscious customers. For instance, the industry is seeing a seismic shift to sustainable processes and products.
While relatively inexpensive fast fashion products based on traditional production methods once dominated the landscape, this is now being remoulded by consumer preference for products based on sustainable production, ethical practices and novel styles. Consequently, domestic denim makers are transitioning into value-added production rather than being mere manufacturers while moving towards sustainability.
In this endeavour, brands are collaborating with eco-conscious suppliers to meet sustainability goals, using recycled materials and eco-friendly production practices. One brand has opted for upcycled denim by using scrap materials to produce stylish new pieces. Others are committing to core values such as ethical sourcing, water conservation and transparent practices. The use of organic cotton is also elevating some brands’ direct-to-farm cotton usage, with farmers receiving a premium for their produce. Some brands pledged support for sustainability by signing the S.U.R.E. Memorandum, which represents India’s biggest sustainability pledge for an improvement in sustainable practices by 2025.
Novel Sustainability Initiatives
Another brand has pioneered the use of Lyocell – a sustainable fibre made from renewable eucalyptus trees that does not denude the soil of its resources, unlike cotton. Moreover, this needs less water, fewer chemicals and pesticides during manufacture. After incorporation into garments, Lyocell retains its superiority against cotton in various ways. For example, it is resistant to colour bleeding, fading or shrinking even after several washes, drapes in a soft, wrinkle-free manner and is specifically suited for sensitive skin because of its hypoallergenic, anti-bacterial, anti-fungal and anti-microbial properties.
Similarly, a leading lifestyle brand has developed a single-bath yarn dyeing procedure for both cotton and polyester. By avoiding two separate dyeing baths, this single bath lowers water consumption, wastewater production and energy usage. The brand has also innovated a novel approach to denim finishing by substituting bio-based materials for synthetic indigo dyes, pre-wetting chemicals and auxiliaries required in sizing and finishing.
In essence, denim brands have gone beyond mere pledges by deploying eco-friendly practices that include circular designs, organic dyes, solar water heaters and the use of sustainable raw materials. Zero-discharge finishing and ozone treatment during the manufacturing process also reduce water usage, while renewable energy sources and energy-efficient machinery minimise their carbon footprint.
Meanwhile, there is tough competition from China, Vietnam, Bangladesh and other nations with lower production costs and more streamlined manufacturing operations. Accordingly, Indian denim makers must raise their standards while containing overall production costs to match the current competitors.
If domestic denim makers can manage this challenge, they will do well given the China+One strategy of many developed nations that seek to diversify their supply chains from their overdependence on Chinese suppliers. Simultaneously, denim brands must educate consumers about sustainable options that will expand the market for eco-friendly products, ensuring their long-term viability. If these steps are managed well, the success of denim manufacturers will be assured sooner rather than later.
