Institutional pressures link circular economy governance and feminized informality in India’s geographical indication registered textile clusters

Circular economy (CE) transition in the global fashion and textile industry is routinely framed as a redesign challenge centred on recycling infrastructure and slow-fashion business models. In India, where the textile sector is structurally feminized and informalized, this framing conceals a deeper problem. CE transition risks worsening the labour vulnerabilities it claims to address, unless governance mechanisms are explicitly designed to prevent this. This paper terms that risk the circular informalization trap. Three verified, publicly available official datasets ground the analysis: India’s Geographical Indication (GI) Act 1999 and the associated registry records of the Controller General of Patents, Designs and Trade Marks (CGPDTM); the Fourth All India Handloom Census 2019-20; and the Periodic Labour Force Survey (PLFS) Annual Report 2023-24, supplemented by the Securities and Exchange Board of India’s (SEBI) Business Responsibility and Sustainability Reporting (BRSR) framework. On this basis, the paper develops two original indices. The GI-CE Institutional Alignment Score (GI-CIAS) measures the degree to which GI Act provisions mandate CE-compatible supply chains across 25 GI-registered Indian textiles. The Circular Informality Exposure Index (CIEI) measures artisan workers’ vulnerability to the social risks of CE transition. GI-tagged craft textile clusters score consistently high on institutional CE alignment (mean GI-CIAS = 4.36/5). Yet their workers are among the most socially vulnerable in India’s manufacturing economy: average daily earnings of ₹270, 72% female workforce concentration, and only 8.8% cooperative market access. India’s top 1,000 listed textile firms face mandatory Environmental, Social, and Governance (ESG) disclosure but systematically omit this informal artisan tier. Nine of 25 clusters (36%) fall into the circular informalization trap: high CE alignment combined with high informality exposure. Four governance recommendations follow, targeting SEBI, India’s Department for Promotion of Industry and Internal Trade (DPIIT), the Ministry of Textiles, and European Union (EU) trade policy.