A news report by the Small Industries Development Bank of India (SIDBI) has revealed a significant surge in environmentally conscious Micro, Small, and Medium Enterprises (MSMEs) across India. It is marking a crucial shift toward sustainability. The study underscores the pivotal role of these “Green MSMEs” in helping India achieve its 2070 net-zero emissions target.
MSMEs, which contribute nearly 30% of India’s GDP and serve as the second-largest employment sector, are also responsible for 10-15% of industrial emissions. Recognizing this dual role, the SIDBI report emphasizes that transitioning to green practices is not just beneficial but essential for long-term economic and environmental resilience.
Key Findings:
- 21% of Indian MSMEs now use solar energy, while 31% have adopted energy-efficient machinery.
- Rooftop solar installations (11.87 GW) have helped businesses cut power bills by 30%, with payback periods of 3-5 years—potentially reducing 110 million tonnes of CO₂ annually.
- Textile, chemical sectors, and states like Gujarat, Maharashtra, and Kerala are leading the green transition.
Challenges Remain:
Despite progress, hurdles such as high upfront costs, limited access to green finance, and low awareness of government schemes persist. Only 10% of MSMEs currently access formal green financing, while 33% remain unaware of key initiatives like the Zero Defect, Zero Effect (ZED) certification.
SIDBI’s Green Push:
To bridge these gaps, SIDBI has launched several initiatives, including:
Green Finance Scheme (GFS) and End-to-End Energy Efficiency (4E) Scheme, offering loans up to ₹50 crore at concessional rates.
MSE-GIFT & MSE-SPICE Schemes under the RAMP program, promoting clean tech and circular economy practices.
International partnerships with AFD (France) and Green Climate Fund (GCF) to expand green financing.
Cluster-level interventions targeting 100 MSME clusters to reduce energy consumption and emissions.
Sustainability Perception Index (SPeX), a quarterly report tracking MSMEs’ ESG readiness.
The Road Ahead:
The report calls for stronger awareness campaigns, easier financing access, and better infrastructure, especially in Tier II and III cities, to accelerate the green transition.
“The rise of Green MSMEs is not just an environmental necessity but a strategic opportunity for India to build a competitive, sustainable economy,” the report concludes.
With MSMEs at the heart of India’s industrial growth, their shift toward sustainability could be a game-changer in the nation’s climate action journey.
