India’s textile industry, which is one of the largest in the world, is a key driver of economic growth. At the same time, India faces a growing challenge of managing textile waste from both production and consumption. 8.5%[1] of the global textile waste is accumulated in India each year, approximately 7800 kilotonnes[1] is managed by ~4.5 million[3] waste workers, ~90%[3] of whom are informal waste workers.
Upaya Social Ventures, along with Laudes Foundation, asked: What would it take to turn this challenge into a dignified employment opportunity for India’s waste workers? The answer was a targeted intervention through a Technical Assistance Facility for Textile Waste Management (TAF). The TAF is designed to support textile waste management enterprises, operating at the nexus of circular economy, job creation, and poverty alleviation, across 4 pillars: Capital, Knowledge, Technology, Networks.
The Problem: Fragmentation, Informality, and Financial Invisibility
Despite growing interest in circular fashion, textile waste management and valorisation in India remains highly informal and fragmented. Small enterprises working in textile waste collection, processing, or upcycling often struggle with poor operational systems, limited access to working capital, and few opportunities to formalise labor practices.
Upaya Social Ventures found that these businesses often serve as critical job creators for waste workers and women in particular. Yet they remain overlooked by mainstream investors due to perceived risk and lack of investment readiness.
The Solution: De-Risking Through Technical Assistance
In March 2024, with the support of Laudes Foundation, Upaya Social Ventures, launched the Textile Waste Management Technical Assistance Facility to support sanitation worker-first enterprises in India to meaningfully engage with textile waste and support circularity in fashion. We onboarded Fashion for Good as a technical partner, Canopy Planet as a resource partner, and Sagana as an advisory partner for the TAF.
The TAF is currently supporting three of Upaya’s existing portfolio companies – Green Worms, Saahas Zero Waste, and WeVois Labs in setting up and operating successful textile waste management business models that can then be replicated and scaled in other geographies.
Innovative Finance Structures for Textile Waste Management:
A very crucial component of Upaya’s TAF is the use of an Impact Linked Finance (ILF) model to drive sustainable social and environmental outcomes. This model aligns the cost of capital with the social and environmental value an enterprise generates, allowing businesses to reduce their capital costs as their impact increases. The ILF’s design incorporated bonus incentives, reinforcing impact additionality and driving higher performance on outcomes.
This approach empowers the most impactful enterprises to scale by offering low-cost capital and optimising their impact.
In designing the TAF, Upaya recognised that advancing both social and environmental goals is essential, and one cannot succeed without the other. The TAF establishes a strong correlation between the quality of jobs for sanitation workers and climate impact. E.g., Higher quality of jobs can lead to more efficient processes, higher recovery rates, and improved environmental outcomes. The TAF took a high-risk, flexible approach to investment, acknowledging that the textile waste industry is still new and developing, giving companies the time and support they needed to reach important milestones like covering costs and becoming profitable.
In May 2025, along with Sagana, Upaya published a report, Towards Dignity in Circularity, capturing insights around the challenges faced and successes achieved in scaling innovative solutions. The report aims to offer recommendations that can inform future efforts and offer a roadmap for a just and sustainable textile waste management sector.
Way forward
Philanthropic capital providers, impact investors, and ecosystem enablers have a key role to play in unlocking the potential of textile waste as a pathway to both environmental sustainability and dignified employment. As the fashion industry embraces circularity, it is essential to ensure that the most marginalised are not left out of this transformation. Reach out to [email protected] to know more about the work.
[1] Fashion for Good (2023) — Sorting for Circularity: India
[2] Fashion for Good (2022) — Wealth in waste
[3] Laudes Foundation (2025) — An inflection point: India’s opportunity to model an inclusive circular textiles economy
[4] Upaya Social Ventures (2025) — Towards Dignity in Circularity
