Blockchain Pilots Show Promise for Tracing Ethical Sourcing in India’s Fragmented Apparel Supply Chain

India’s apparel industry is a vast, sprawling network of millions of workers, thousands of micro, small, and medium enterprises (MSMEs), and countless informal production clusters spread across the subcontinent. Behind every garment lies a tangled chain of cotton traders, spinners, dyers, weavers, stitchers, and exporters, most of whom operate with little digital infrastructure and even less documentation. This fragmentation has long made it nearly impossible for brands, regulators, and consumers to answer a deceptively simple question: where exactly did this shirt come from, and was it made ethically? A new study published in Discover Sustainability suggests that blockchain technology, combined with everyday tools such as QR codes and smart contracts, could begin to close that gap, even in environments where digital readiness remains stubbornly low.

The research, conducted by Tejinder Singh Lakhwani of Manipal University Jaipur and Ettishri B. Rajput of the National Institute of Fashion Technology in Gandhinagar, proposes a blockchain-enabled framework tailored specifically to India’s MSME-driven apparel ecosystem. Rather than treating blockchain as a one-size-fits-all solution imported from large Western supply chains, the authors designed their framework around the realities of Indian production clusters: intermittent connectivity, limited digital literacy, and deeply entrenched paper-based workflows. The work was supported by the Ministry of Education and the Government of India, and the authors report that open access funding was provided by Manipal University Jaipur.

At the technical heart of the framework lies a layered data architecture that combines distributed ledger technology with Internet of Things (IoT) enabled tagging and QR-based verification. In the proposed system, each garment or batch of material acquires a digital identity at an early stage of production. IoT tags and QR codes attach physical goods to their digital twins, recording events such as fiber origin, dyeing processes, certification checks, and handoffs between suppliers. Because the resulting records are written to a blockchain, they become tamper-evident: no single participant, however powerful, can quietly rewrite the history of a product to conceal counterfeit inputs or unsustainable practices. Smart contracts, self-executing programs stored on the ledger, automate parts of the workflow, releasing payments or verifying certifications only when predefined conditions are met, thereby reducing the reliance on intermediaries and manual audits.

The researchers adopted a design science research-oriented exploratory approach, moving through three stages: conceptual framework design, pilot implementation across apparel clusters linked to the Open Network for Digital Commerce (ONDC), and qualitative stakeholder evaluation based on interviews and thematic analysis. ONDC, India’s government-backed digital commerce network, served as a useful testbed because it already connects a wide range of sellers and buyers on a common digital rails system. Embedding blockchain-based traceability into ONDC-linked clusters allowed the team to observe how the technology performs in authentic commercial settings rather than idealized laboratory conditions.

The pilot findings were cautiously encouraging. Participants reported improvements in inventory visibility, documentation visibility, certification transparency, and, critically, stakeholder trust. Verification processes that once required chasing paperwork across multiple offices became faster through QR authentication, and smart contract-supported workflows reduced documentation inconsistencies that had previously plagued coordination between buyers and suppliers. In an industry where counterfeit raw materials and forged sustainability certifications remain persistent risks, the ability to scan a QR code and retrieve an immutable production history represents a meaningful shift in how trust is established. Instead of trusting the word of an unknown supplier halfway up the chain, brands and consumers can trust the mathematics of the ledger itself.

The study’s authors are careful, however, not to overstate the results. This was an exploratory pilot, evaluated through qualitative interviews rather than large-scale quantitative trials, and the findings reflect perceptions of improvement rather than statistically measured outcomes. Thematic analysis of stakeholder interviews surfaced substantial barriers that could easily derail adoption at scale. Digital literacy limitations were prominent: many workers and small-firm owners in informal clusters had never used smartphone-based verification tools, and some lacked the literacy needed to navigate even simplified interfaces. Infrastructural constraints, including unreliable internet connectivity and inadequate hardware, further complicated deployment in the very clusters where traceability is most needed.

Stakeholder resistance emerged as another significant theme. Participants in the study noted that informal supply chain environments run on relationships, discretion, and sometimes opacity, and that mandatory digital record-keeping can be perceived as surveillance, added cost, or a threat to established intermediaries whose role depends on information asymmetry. Small enterprises worried about the cost of tags, training, and compliance, while others questioned whether buyers would actually pay premiums for verified ethical sourcing. These findings underscore a recurring lesson in technology-for-development research: the hardest problems are rarely technical. A distributed ledger is only as strong as the willingness of the people feeding data into it, and if MSMEs do not see clear economic value, the system risks becoming an empty shell with verifiable records of nothing meaningful.

In response to these barriers, the authors propose a set of India-specific design principles that could shape future deployments. Mobile-first interfaces are essential, given that smartphones are the primary computing device in most production clusters. Vernacular-language support, allowing workers to interact with verification tools in regional Indian languages rather than English, was highlighted as a key enabler of inclusive adoption. The researchers also emphasize policy alignment, arguing that blockchain traceability frameworks should dovetail with existing government digital infrastructure and sustainability compliance regimes rather than operating as parallel, disconnected systems. By anchoring the framework to ONDC and aligning it with environmental, social, and governance (ESG) compliance demands from international buyers, the study sketches a pathway by which traceability could become a shared public utility rather than a private luxury of large export houses.

The broader implications extend well beyond apparel. Emerging economies around the world face similar combinations of fragmented production, informal labor, and mounting pressure from global buyers to prove ethical and sustainable sourcing. Textile and apparel supply chains have become a particular flashpoint following international regulations on forced labor, deforestation-linked inputs, and greenwashing claims, all of which demand verifiable chain-of-custody data. If a blockchain framework can be made to work in the messy, low-margin, high-fragmentation environment of Indian MSME clusters, the same design principles, mobile-first, vernacular-enabled, and policy-aligned, could plausibly transfer to agriculture, handicrafts, leather, and other sectors where traceability has historically been aspirational rather than operational.

The study also contributes to a growing scholarly conversation about how transparency technologies interact with existing power structures. Distributed ledgers do not automatically distribute power; they record whatever participants choose to write, and the governance of who gets to write, read, and validate data matters as much as the cryptography underneath. By focusing on MSME integration rather than merely brand-side visibility, the Indian framework attempts to flip the usual script, treating small suppliers as active participants in a shared data infrastructure rather than as passive endpoints of corporate monitoring. Whether that vision survives contact with commercial reality remains an open question, but the pilot offers a concrete, empirically grounded starting point. As the authors conclude, blockchain-enabled traceability in emerging economies will succeed not through technology alone, but through thoughtfully designed solutions that respect the digital, linguistic, and institutional realities of the millions of small producers who actually make the world’s clothes.

Subject of Research: Blockchain-enabled transparency and traceability for ethical sourcing and MSME integration in the Indian apparel supply chain

Article Title: Blockchain enabled transparency and traceability for ethical sourcing and MSME integration in the Indian apparel supply chain

Article References: Lakhwani, T. S., & Rajput, E. B. (2026). Blockchain enabled transparency and traceability for ethical sourcing and MSME integration in the Indian apparel supply chain. Discover Sustainability. https://doi.org/10.1007/s43621-026-04444-7

Image Credits: AI Generated

DOI: 10.1007/s43621-026-04444-7

Keywords: blockchain, apparel supply chain, traceability, ethical sourcing, IoT, India, MSMEs, smart contracts, ONDC, ESG compliance, sustainability, supply chain management