India Pushes Textile Circular Economy as GeM Opens Government Market to Recycled Products

India is moving to use the scale of government procurement to create a larger domestic market for recycled and upcycled textiles, with the Government e-Marketplace (GeM) and the Textiles Committee signing a new Memorandum of Understanding aimed at bringing products manufactured from textile waste, discarded fabric and used clothing into mainstream public purchasing.

The agreement was formalised during the 62nd Foundation Day celebrations of the Textiles Committee in Mumbai. GeM operates under the Ministry of Commerce and Industry, while the Textiles Committee functions under the Ministry of Textiles. Together, the two organisations intend to create what the government describes as a “Waste-to-Value-to-Market” ecosystem, in which discarded textile material is converted into commercially useful products and connected with institutional buyers through the GeM platform.

The initiative is significant because one of the major challenges facing textile recycling is not simply the ability to process waste but the creation of consistent demand for t30he resulting products. Government departments, public institutions and other eligible GeM buyers collectively represent a large procurement market. Creating dedicated channels for recycled products could therefore provide recyclers and upcyclers with a more predictable customer base.

Under the agreement, the Textiles Committee will identify, verify, certify and recognise eligible producers of recycled and upcycled textile goods. It will also conduct stakeholder consultations, support capacity building and market research, and assist in developing technical specifications for products that can be offered to government buyers.

This certification and standardisation component is particularly important. Recycled and upcycled products can vary considerably depending on the source material, processing technology and manufacturing method. Establishing specifications can give government purchasers greater confidence about quality while helping genuine recycling enterprises distinguish themselves from products that merely carry sustainability claims.

GeM, meanwhile, will create dedicated online categories for recycled and upcycled textile products, facilitate seller registration and provide market linkages between producers and public-sector buyers. The platform will also promote the products among government purchasers and provide training and handholding support to smaller recycling and upcycling enterprises attempting to enter the public procurement system.

The initiative will operate through a hub-and-spoke model, using the Textiles Committee and its affiliated offices to reach recyclers and upcyclers across different regions. These offices will support mobilisation, training and the development of appropriate product catalogues and specifications for GeM procurement.

MSMEs and Women-Led Enterprises Could Benefit

A major focus of the programme will be MSMEs, women entrepreneurs, artisans, local enterprises and smaller recycling businesses operating within India’s emerging circular textile economy.

Many upcycled textile products are produced by relatively small enterprises that convert discarded garments, industrial fabric scrap or production waste into bags, furnishings, accessories, office products and other usable goods. Such businesses often face difficulty gaining access to large institutional buyers even when their products have commercial potential.

Opening government procurement channels could help address that problem by allowing smaller enterprises to compete for orders through a national digital marketplace.

The government has linked the programme with the broader objectives of Vocal for Local, Make in India and Aatmanirbhar Bharat, arguing that textile waste can become an economic input rather than simply a disposal problem.

Turning Textile Waste Into an Economic Resource

The textile industry generates waste at several stages. Manufacturing produces cutting waste, yarn waste, defective fabric and other scraps, while consumers generate large quantities of discarded clothing and household textiles.

A conventional linear system generally follows a pattern of producing, consuming and discarding these materials. A circular model instead attempts to recover fibres and products, extend their useful life and return materials to the economy.

Recycling may involve converting discarded textiles back into fibre or other usable raw materials. Upcycling generally involves transforming waste or used materials into products with renewed or higher commercial value without necessarily breaking the material down into its original fibre.

The GeM initiative creates an important final link in that chain: market access.

Without buyers, recycling infrastructure alone cannot produce a sustainable circular economy. By bringing government demand into the system, the programme could encourage manufacturers and entrepreneurs to invest in collection, sorting, processing, design and production.

Government Procurement Could Create Scale

GeM CEO Mihir Kumar said connecting certification, standardisation and market access could help generate reliable demand for products manufactured from textile waste. Government procurement could support adoption across offices, public institutions, official gifting and other government-use applications.

That distinction makes the programme particularly interesting from an industrial-policy perspective. Rather than relying exclusively on subsidies or environmental regulations, the government is using its purchasing power to stimulate a new market.

If ministries, public-sector organisations and government institutions begin procuring recycled products at meaningful scale, suppliers would gain an incentive to increase production while improving quality and consistency.

Larger procurement volumes could eventually reduce costs as recycling businesses expand and processing technologies mature.

Part of India’s Larger Circular Textile Strategy

The new GeM-Textiles Committee partnership fits within a broader government effort to push India’s textile industry towards more sustainable production.

The Union Budget 2026-27 announced the Tex-Eco Initiative, aimed at supporting textile-waste management, recycling technologies, circular-economy practices, sustainable packaging and the development of recycled fibres and higher-value products.

The government has also established an ESG Task Force addressing sustainable textile production, certification and exports. Other initiatives include programmes involving the United Nations Industrial Development Organization and the United Nations Environment Programme to reduce hazardous chemicals, improve lifecycle assessment and encourage circular manufacturing models.

Public procurement of upcycled goods has also been under development for some time. Government documents previously referred to cooperation among the Textiles Committee, GeM and the Standing Conference of Public Enterprises (SCOPE) to encourage institutional procurement of upcycled products.

The latest GeM-Textiles Committee agreement takes this effort further by defining mechanisms for producer certification, seller onboarding, dedicated GeM categories, product specifications and capacity building.

Sustainability Could Become an Export Advantage

The circular-economy push also has implications beyond the domestic market.

Environmental standards, traceability and sustainable sourcing are becoming increasingly important in major international textile and apparel markets. Indian manufacturers that build stronger recycling systems and demonstrate credible sustainability credentials could therefore strengthen their competitiveness in global supply chains.

India already has one of the world’s largest textile and apparel industries. Textile and apparel exports, including handicrafts, reached about ₹3.25 lakh crore in 2025-26, according to the Ministry of Textiles.

Developing a large domestic recycling ecosystem could allow Indian companies to supply both traditional textile products and an expanding range of recycled fibres, fabrics and finished goods demanded by environmentally conscious global brands.

From Waste Management to Industrial Opportunity

The larger significance of the GeM-Textiles Committee MoU lies in treating textile waste as an economic resource rather than merely an environmental problem.

A discarded garment can potentially become recycled fibre, an industrial textile, a furnishing product, a bag or another value-added item. Each additional stage creates economic activity in collection, sorting, processing, manufacturing, design and distribution.

The MoU was signed by GeM Additional CEO Ajit B. Chavan and Textiles Committee Secretary Kartikay Dhanda, in the presence of Union Textiles Minister Giriraj Singh, Maharashtra Textiles Minister Sanjay Savkare, senior officials and industry representatives.

India’s textile sustainability strategy is therefore increasingly moving beyond recycling campaigns towards the creation of an actual circular marketplace. By combining certification, technical standards, digital procurement and government purchasing power, the GeM initiative could give recycled and upcycled textiles something that many sustainability programmes struggle to create — a dependable route from waste to commercial demand.

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