Tamil Nadu Textile Industry Could Save Up to ₹3,250 Crore Annually Through Clean Energy Transition

Tamil Nadu’s textile industry could achieve annual savings of up to ₹3,250 crore by transitioning to renewable energy, according to a new report released by Bengaluru-based think tank Climate Risk Horizons.

The report comes at a time when industries across India are facing increasing cost pressures due to rising fuel prices and growing concerns over energy security. Tamil Nadu, which accounts for nearly one-fourth of India’s textile production, has witnessed a significant increase in production costs driven largely by higher fuel and energy expenses.

According to the study, a complete transition to renewable electricity could generate annual savings ranging from ₹2,320 crore to ₹3,250 crore, depending on electricity pricing scenarios. The analysis assessed renewable energy costs at ₹5, ₹5.5, and ₹6 per kilowatt-hour and found that lower renewable energy prices could substantially improve the sector’s cost competitiveness.

The report further estimates that a broader shift to clean energy—including renewable electricity and clean heat generated through electric boilers powered by renewable energy—could result in annual savings ranging between ₹1,560 crore and ₹2,770 crore. While biomass currently remains a relatively low-cost fuel source, the study notes that replacing biomass with renewable-powered electric heating would still deliver significant economic and environmental benefits.

Tamil Nadu’s textile industry, one of the state’s largest employment generators and export-oriented sectors, has seen its energy expenditure nearly double over the past four years. The report highlights a growing fuel cost intensity across the sector, indicating rising energy costs and declining operational efficiency.

The findings also point to increasing pressure from international sustainability regulations and buyer expectations. India’s textile industry currently has one of the highest carbon footprints among major textile-exporting countries, with emissions estimated at more than 12.5 kg CO₂ equivalent per kilogram of textile produced. This is significantly higher than competing textile manufacturing hubs such as Vietnam, Bangladesh, and China.

Researchers noted that transitioning to renewable-powered electricity and clean heat technologies could help manufacturers reduce emissions while strengthening their competitiveness in global export markets. Such measures may also help companies comply with emerging sustainability frameworks, including carbon-related trade regulations and climate commitments increasingly adopted by global fashion brands.

The report also raises concerns over the textile sector’s growing reliance on biomass fuel. An analysis of forest cover data suggests a correlation between increased biomass consumption and the decline of dense forest areas in several major textile-producing districts across Tamil Nadu between 2019 and 2023. The study estimates that the sector may have consumed biomass equivalent to 65 million to 108 million trees over the past decade.

Climate Risk Horizons emphasized the need for coordinated action from industry stakeholders, policymakers, financial institutions, and global brands. The report recommends greater support for industrial renewable energy deployment, expansion of electrified heating technologies, access to concessional financing, and the development of a state-level decarbonisation roadmap for the textile sector.

The think tank also called on state authorities and regulators to facilitate wider renewable energy adoption among textile manufacturers, including MSMEs, to enhance industrial competitiveness, support economic growth, and create long-term employment opportunities while reducing emissions.