Tamil Nadu Textile Sector Urges Policy Support for Clean Energy

Textile associations representing the state’s entire value chain have called for urgent reforms to lower electricity costs and bolster global competitiveness.

CHENNAI — Representatives from Tamil Nadu’s textile industry have formally petitioned the state government for enhanced policy support to facilitate a transition toward clean energy. During an industry meeting today with Tamil Nadu Industries Minister S. Keerthana, the Southern India Mills' Association (SIMA) and other prominent textile bodies outlined a series of demands aimed at lowering operational costs and strengthening the state's standing under the "Tamil Nadu Vision 2035" initiative.

The appeal comes as the industry faces mounting pressure to reduce its carbon footprint while grappling with rising fuel and electricity expenses that have challenged its export competitiveness.

Economic Imperative for Decarbonization

Data from a recent study by the think tank Climate Risk Horizons highlights the financial stakes for the state’s textile sector, which contributes nearly 17% to Tamil Nadu's manufacturing Gross Value Added (GVA). The report estimates that a full transition to renewable energy could save the industry between ₹1,560 crore and ₹3,250 crore annually.

Industry leaders emphasized that switching to 100% renewable electricity—through green tariffs and open-access mechanisms—could reduce power costs by as much as 41.5%. "Rising fuel costs are one of the reasons for the declining competitiveness of the state's textiles," noted Rakesh Ranjan, co-author of the Climate Risk Horizons report. Textile exports from the state have largely plateaued at approximately $7.4 billion since 2017, prompting an urgent push for systemic reform.

Industry Demands and Policy Roadmap

The textile associations have requested that the state government and electricity regulators facilitate greater renewable energy deployment, specifically for Micro, Small, and Medium Enterprises (MSMEs). Key demands include:

• Joint Renewable Procurement: Creation of mechanisms to allow smaller units to aggregate demand and procure renewable power collectively.

• Electrified Heating Infrastructure: Support for replacing fossil-fuel and biomass-based boilers with renewable-powered electric heating systems.

• Concessional Financing: Access to affordable capital to fund the transition to green industrial infrastructure.

• Grid-Level Reforms: Streamlining open-access provisions to make it easier for manufacturers to source power from renewable energy projects.

Global Sustainability Pressures

The move is not solely driven by cost-cutting; global fashion brands are increasingly demanding lower carbon emissions from their supply chains. With frameworks such as the Carbon Border Adjustment Mechanism (CBAM) and international climate commitments taking effect, the transition to green energy is now considered a functional necessity to retain major export contracts.

"Global brands sourcing from Tamil Nadu and other Indian states must enable large-scale electrification of heat-based processes," said Ashish Fernandes, director of Climate Risk Horizons. By aligning with these global standards, the state’s textile sector aims to revitalize its growth and secure its position as a global manufacturing hub.

Official Sources

Information for this report is based on industry meeting outcomes reported by Fibre2Fashion and data from Climate Risk Horizons.

Why It Matters

For Tamil Nadu’s economy, the textile sector is a primary employment generator, supporting over 8.6 lakh workers in the organized sector. Policy support for clean energy is viewed as critical to ensuring the sector remains economically viable, reduces energy price volatility, and meets the stringent environmental standards required for the modern global export market.

Key Facts at a Glance

• Economic Impact: The textile industry contributes roughly 17% to Tamil Nadu’s manufacturing GVA and accounts for 27% of India’s textile exports.

• Potential Savings: Industry-wide transition to renewable energy could generate annual savings of up to ₹3,250 crore.

• Energy Trends: Total energy expenditure in the sector has nearly doubled over the past four years, driven by rising fossil fuel costs.

• Global Compliance: The shift is essential to meet international carbon standards, including the Carbon Border Adjustment Mechanism (CBAM).

Frequently Asked Questions

1. Why is the textile industry in Tamil Nadu seeking policy support for clean energy? The sector faces stagnating exports and rising production costs. Transitioning to renewable energy is seen as a way to lower power expenses and meet the sustainability requirements of global buyers.

2. How much can the textile industry save by switching to clean energy? According to recent reports, a full transition to renewable energy could lead to annual industry-wide savings ranging from ₹1,560 crore to ₹3,250 crore.

3. What are the main obstacles to adopting green energy for textile manufacturers? Primary challenges include high upfront capital investment for new technologies like electric boilers, grid-level regulatory hurdles for open-access power, and the need for concessional financing for MSMEs.

Source: Fibre2Fashion, The Hindu, Climate Risk Horizons.