IDFL Embroiled in fraud scandal: Questions raised about Rahul Bhajekar’s involvement and silence

In a startling revelation, we aim to draw the attention of the Agricultural and Processed Food Products Export Development Authority (APEDA), the Global Organic Textile Standard (GOTS), Textile Exchange, the Ministry of Textiles, the United States Department of Agriculture (USDA), brands, and supply chain members to an alleged ongoing fraud in the organic cotton industry involving suppliers certified by IDFL India.

Our data analysis team has examined figures published by APEDA. The total organic production in India for the year 2022-23 was reported as 2,664,679 metric tons, with cotton comprising 807,866 metric tons—approximately 1.7 million bales and accounting for 30% of India’s total organic produce. For the year 2023-24, total organic production increased to 3,228,233 metric tons, suggesting that cotton production would be roughly around 2 million bales, considering the 30% proportion.

However, it has been identified that the total organic cotton consumed by customers of IDFL India in 2024 amounts to 48,485,527 metric tons of organic raw cotton, which is approximately 3.15 million cotton bales. Despite the average organic cotton production in India hovering around 1.7–2 million bales in recent years, certification bodies like IDFL alone have accepted 3.15 million bales of input as organic.

Further analysis indicates that, according to the GOTS public database, IDFL has certified around 25–30% of ginning units engaged in organic cotton production, while the remaining 70–75% are certified by other certification bodies such as Control Union, Intertek, GSCS, Bureau Veritas, and Ecocert. These statistics raise serious questions about the transparency of IDFL in accepting and approving organic cotton bales under GOTS and Textile Exchange standards.

The data suggests that cotton suppliers certified by IDFL India may be involved in fraudulent activities, with IDFL India purportedly facilitating the generation of 3.15 million organic cotton bales from October 2023 to October 2024. We believe that both GOTS and Textile Exchange have oversight over data reported by certification bodies annually. It is surprising that these organizations have not conducted any investigations into IDFL India, despite statistics indicating a significant gap between the production of organic raw cotton and the production of organic cotton bales by ginning facilities.

If this situation continues unchecked, stakeholders involved in the organic cotton business may need to consider boycotting materials certified under GOTS and OCS. We urge the Indian government to introduce strict guidelines for managing organic cotton within the textile value chain, rather than relying on private schemes like GOTS and OCS where there is no control over volumes. GOTS and Textile Exchange, which claim NGO status, are accused of misleading the global market alongside fraudulent cotton ginners by creating fake volumes of organic cotton for export. Furthermore, we urge APEDA to rigorously monitor certification bodies such as USOCA, SOCA, and NOCA, which are allegedly assisting ginners in obtaining counterfeit organic raw cotton transaction certificates (TCs) generated manually instead of through Tracenet. These counterfeit TCs are reportedly being accepted by IDFL under GOTS and Textile Exchange standards.

In recent years, there have been numerous complaints regarding organic cotton fraud in India, causing reputational damage to the country globally because the government lacks control over the export of organic cotton products certified under GOTS and OCS. Similar to the National Programme for Organic Production (NPOP), the government should implement traceability tools to manage the volumes of organic textile products being exported to maintain consumer trust in Indian products.

Failure to do so could adversely affect the Indian economy, particularly the textile sector, in the coming years.

We also call on the Indian government to investigate GOTS and Textile Exchange, which are registered in Europe and the USA as NGOs but operate in India, earning millions of rupees annually from Indian textile factories. Despite these publicly available statistics, it is perplexing that scheme owners like GOTS, Textile Exchange, and certification bodies approved under these organizations are not performing their due diligence. This situation clearly demonstrates that the concept of “organic” is being exploited as a method to earn millions of dollars by various stakeholders—including cotton suppliers, brands, certification bodies, standard bodies, and accreditation bodies—while consumers are unknowingly purchasing conventional products marketed as organic due to uncontrolled volumes.

I have already submitted a comprehensive set of evidence to GOTS, clearly demonstrating that fraudulent organic transaction certificates were issued by IDFL. These fraudulent activities have been confirmed by multiple stakeholders, further supporting the validity of the claims. Despite the seriousness of the matter, Mr. Rahul Bhajekar, who holds a significant position in overseeing these processes, has consistently ignored the ongoing fraudulent activities being carried out by IDFL. This inaction raises significant concerns about the lack of accountability and diligence on part of key figures within the certification system.

To further substantiate these claims, APEDA has now confirmed the production data for all organic cotton in India, which aligns with the evidence I have previously provided. This confirmation by APEDA highlights the broader scope of the issue, emphasizing the systemic flaws within the industry that allow for fraudulent certifications to persist. In addition to this, I have raised multiple complaints regarding the overcapacity of ginning operations and warehousing facilities in India, which are further complicating the integrity of the organic cotton supply chain. This includes the presence of fake warehouses, such as mobile shops that falsely claim to operate as certified facilities, which directly undermines the transparency and legitimacy of the industry.

To give you a better understanding of the scale of the issue, I have outlined below the details of specific suppliers involved in these fraudulent practices, below 2 are the examples only many more suppliers are involved:

Beriwali Agriable LLP:
- Total Purchased Lint Cotton: 41,986 bales
- Total Sales Lint Cotton: 446,362 bales
- Net Ginning: 404,376 bales
Farmers United House:
- Total Purchased Lint Cotton: 23,563 bales
- Total Sales Lint Cotton: 393,038 bales
- Net Ginning: 369,475 bales

The discrepancies between the purchased lint cotton and the sold lint cotton, along with the ginning figures, further suggest the scale of the fraudulent operations and the overcapacity that is taking place. These figures raise significant concerns about the authenticity of the certifications associated with these suppliers and point to a larger, systemic issue that requires immediate attention.

Despite presenting all of this evidence and bringing these critical concerns to the attention of GOTS, Textile Exchange, and the accreditation bodies, no substantial or decisive action has been taken to address these violations on IDFL. The continued inaction by these organizations is deeply troubling, as it allows for the perpetuation of fraudulent practices that not only damage the reputation of the organic industry but also harm consumers and stakeholders who rely on the integrity of organic certification.

Over the past two years, more than 50 pieces of evidence of fraud have been provided to Mr. Rahul Bhajekar and GOTS, but no action has been taken against IDFL. According to market sources, IDFL’s head office has reportedly paid a substantial bribe to Rahul Bhajekar to protect IDFL from clear and proven fraudulent evidence.