Trade Essays

CSRD entered into force on 5 January 2023 and began applying to large EU companies from the 2025 financial year. Companies must report according to European Sustainability Reporting Standards (ESRS), covering environmental, social, and governance topics across their entire value chains — including their Indian suppliers.

The Indian supplier impact: An EU pharmaceutical company sourcing APIs from Hyderabad must report on carbon emissions, water consumption, labour practices, and chemical waste of its Indian API suppliers. An EU clothing brand sourcing garments from Bengaluru must report on working conditions, energy consumption, and chemical management of its Indian garment factories.

What Indian suppliers will be asked to provide: GHG emissions (Scope 1, 2, and potentially Scope 3 upstream), energy consumption and renewable energy percentage, water consumption and wastewater, chemical waste, worker welfare data (wages versus minimum wage, safety incident rate, working hours), supplier diversity, and compliance with ILO core labour conventions.

An Indian supplier 6-step CSRD readiness plan: (1) Identify which EU buyers are subject to CSRD (companies with 500+ employees from 2025); (2) Inventory what sustainability data these buyers will likely request; (3) Implement GHG accounting using GHG Protocol methodology; (4) Obtain third-party sustainability audit (SA 8000, SMETA, EcoVadis); (5) Build a supplier sustainability questionnaire response library; (6) Consider EcoVadis or CDP rating — standardised ratings that many EU buyers accept in lieu of bespoke data requests.

EUDR (EU 2023/1115) requires operators to ensure their products: (a) have not been produced on land deforested after 31 December 2020, and (b) are produced in compliance with relevant laws of the country of production. Regulated commodities: cattle, cocoa, coffee, palm oil, soya, wood, rubber, and derived products including leather, chocolate, paper, furniture, and tyres.

Indian coffee exporters: India exports USD 800M+ in coffee to EU annually. Under EUDR, Indian coffee exporters must geo-locate coffee plots with GPS coordinates, demonstrate plots were not established through post-2020 deforestation using satellite monitoring evidence, provide compliance declarations through EU TRACES portal, and verify compliance with Indian environmental and land use laws.

Indian rubber exporters: Kerala dominates Indian rubber production. Indian rubber and rubber products (tyres, latex goods) fall under EUDR. The challenge: Kerala rubber cultivation is longstanding but plot-level geo-location documentation systems are not universally established across smallholder farmers who dominate Indian rubber production.

Indian leather exporters: India is the world third-largest leather exporter. Leather as a cattle-derived product is covered by EUDR. Indian leather manufacturers must trace hides and skins to cattle farms and verify those farms are not on deforested land — requiring supply chain transparency back to the farm level.

Action required now: Identify which products fall under EUDR scope. Map supply chain to farm or plantation level. Register on EU TRACES NT portal. Implement geo-location for key sourcing areas. Engage with EU buyers EUDR compliance coordinators.

EU textile buyers have converged on two primary sustainability certification standards: GOTS for organic fibre textiles, and OEKO-TEX Standard 100 for tested-harmless textiles of any fibre composition. Understanding which standard your EU buyer requires is the first step to unlocking EU market access.

GOTS — Global Organic Textile Standard: GOTS certifies textiles made from organic natural fibres covering the entire supply chain from ginning through spinning, weaving, dyeing, and final product manufacturing. Two GOTS tiers: organic (95%+ certified organic fibres) and made with organic materials (70%+ organic fibres). GOTS prohibits formaldehyde, azo dyes cleaving to carcinogenic amines, heavy metals, and PVC. GOTS also requires social criteria: ILO core conventions, no forced or child labour, minimum wage compliance. Certification cost: approximately INR 80,000-200,000 per year depending on facility size.

OEKO-TEX Standard 100: Tests the final textile product for harmful substances regardless of fibre type — banned azo colourants, formaldehyde, heavy metals, pesticides, and skin-sensitising dyes. Unlike GOTS, OEKO-TEX 100 covers synthetic as well as natural fibre textiles. Cost: approximately INR 15,000-50,000 per article type depending on product class. Certificate valid 12 months.

Which do you need? GOTS: required by EU organic clothing brands — mandatory for any product labelled organic in EU. OEKO-TEX 100: required by most EU mid-market and premium retailers (H&M, IKEA, Lidl, Marks and Spencer) as baseline consumer safety assurance. Many EU buyers require both: GOTS for their organic range and OEKO-TEX 100 for their conventional range.