What is a factory compliance audit? Do Indian wholesale buyers need to worry about it?

A compliance audit is a formal inspection of a manufacturing facility to verify that it meets specified standards — covering labour practices, wages, safety, environmental practices, and product quality systems.

Types relevant to Indian textiles:

• SA8000: Social accountability standard — fair wages, no child labour, safe working conditions
• SMETA (Sedex Members Ethical Trade Audit): Widely required by UK and European buyers
• WRAP (Worldwide Responsible Accredited Production): Common for US buyers
• GOTS: Organic textile standard covering processing and labour

For domestic wholesale buyers: Compliance audits are not required for domestic wholesale trade in India. They become relevant when:

• Exporting to EU or US buyers who mandate supplier audits
• Supplying to large Indian retail chains (FabIndia, Taneira, W, Biba) who have their own supplier codes
• Building a sustainable or ethical fashion brand that wants to verify its supply chain