Stitching Standards 2.0: Environment & Fashion Industry India - UK CETA

Chapter 21 of the UK-India Comprehensive Economic and Trade Agreement (CETA) introduces environmental obligations into the trade framework. These provisions aim to ensure that economic integration does not compromise environmental standards. They establish binding commitments on environmental protection, sustainable development, climate change mitigation, and pollution control, which influence how fashion businesses operate under the agreement.

Scope of Environmental Law (Article 21.1)

Certain statutes already govern textile effluents, hazardous waste, and emissions, all key aspects of fashion manufacturing. By incorporating these definitions into a trade agreement, compliance with domestic environmental laws becomes a prerequisite for accessing trade benefits.

Right to Regulate and Non-Derogation Principle (Article 21.3)

Article 21.3 recognizes each Party’s right to set its own environmental standards but prohibits lowering those standards to attract trade or investment. This provision has direct implications for the fashion sector, where regulatory relaxation has historically been used to reduce operational costs. Under CETA, such practices are explicitly disallowed. Therefore, fashion companies must meet prevailing environmental norms without expecting leniency in exchange for economic contribution.

Sustainable Development Objectives (Article 21.2)

The chapter aligns trade policy with global sustainability instruments. For the fashion industry, this translates into expectations of sustainable resource management, water conservation, and adoption of circular economy principles. 

Climate Change Commitments (Article 21.5)

The fashion sector, which accounts for significant greenhouse gas emissions, must therefore align with carbon reduction targets. This may necessitate changes such as shifting to renewable energy, improving energy efficiency in manufacturing, and reducing emissions from logistics operations. 

Trade in Environmental Goods and Services (Article 21.6)

The agreement encourages trade in goods and services that support environmental objectives. This benefits fashion businesses adopting biodegradable fabrics, low-impact dyes, or recycling technologies, potentially giving them preferential treatment under the trade regime. However, these benefits are likely contingent on certification and accurate labeling, which imposes additional legal responsibilities on manufacturers and exporters to substantiate sustainability claims.

Climate Change Commitments and Fashion’s Carbon Footprint

For the fashion industry, this segment is significant. From high water usage to carbon emissions from manufacturing and logistics, fashion is environmentally intensive. This article does not impose binding restrictions, but it does compel fashion brands and retailers to begin aligning their operations with climate objectives. That includes transitioning to low-emission production processes, disclosing carbon footprints, and investing in renewable energy in manufacturing hubs.

Protecting Biodiversity and Indigenous Rights

Article 21.10 focuses on biodiversity and the protection of natural resources and traditional knowledge. The fashion sector frequently draws from biodiversity through raw materials (like cotton, leather, silk) and through the use of indigenous craft and cultural motifs. For fashion companies, this could mean formal permissions, royalties, or community agreements when using traditional designs or natural materials tied to indigenous knowledge. This helps promote cultural sustainability alongside environmental sustainability.

Agriculture and Sustainable Fibre Sourcing

Given India’s status as one of the world’s largest cotton producers, this provision could have wide-reaching consequences. For brands, this may necessitate shifting sourcing to farms that are certified under standards like GOTS (Global Organic Textile Standard). It also promotes supply chain resilience, aligning with consumer demand for transparency about the farming conditions behind the clothes they wear. 

Promoting Environmental Goods in Fashion

Article 21.13 supports trade in environmental goods and services. This provision can enhance the accessibility and competitiveness of green fashion products, including biodegradable fabrics, water-saving machinery, or non-toxic dyes.

For fashion enterprises, particularly SMEs and sustainable startups, this opens the door to preferential tariffs, tax benefits, or collaborative innovation programs. It also signals the development of a preferential trade environment for eco-friendly fashion, making sustainability not just a responsibility but a competitive advantage.

Eco-Labels and Green Certifications

Article 21.14 addresses voluntary environmental schemes and eco-labelling. The fashion industry, which often uses labels such as Fair Trade, OEKO-TEX®, or Cradle to Cradle, benefits from this legitimization.

This provision encourages mutual recognition and standardization of labels, helping brands avoid the legal risks of greenwashing and misrepresentation. It also supports consumer trust in eco-labelled products, enhancing the commercial value of third-party certifications. Legal risk management becomes simpler as governments work to ensure such labels are transparent, science-based, and internationally accepted.

Corporate Social Responsibility (CSR) in the Supply Chain

Article 21.15 promotes CSR based on international frameworks like the UN Guiding Principles on Business and Human Rights. Though voluntary, this provision creates normative pressure on brands to implement ethical practices, especially regarding labour conditions in garment factories.

For fashion companies with operations in India or the UK, this includes expectations around safe working environments, living wages, freedom of association, and grievance mechanisms. While it may not be legally binding, failure to comply can attract media scrutiny, investor divestment, or public boycotts. It also sets the stage for future regulation mandating non-financial disclosures, such as modern slavery statements.

Conclusion

The UK-India CETA represents a progressive and holistic approach to integrating sustainability into trade policy. Though many provisions are non-binding, they carry legal and ethical implications that will shape how fashion companies operate across borders. From carbon accounting and ethical sourcing to biodiversity protection and CSR, these articles outline the framework within which the next generation of fashion must function—ethical, accountable, and resilient. For companies that adapt early, the agreement is not a challenge but an opportunity to lead the global fashion industry into a sustainable future.

By Bani Chahal, Prathama RK  & Riya Singh