NITI Aayog Unveils Roadmap To Green MSMEs Ahead Of India’s Net-Zero Push

New Delhi, Jan 22 (KNN) Government think tank NITI Aayog on Wednesday unveiled a sector specific roadmap for the green transition of micro, small and medium enterprises (MSMEs), outlining pathways for the sector to reduce carbon emissions and become more sustainable as India pursues its net zero by 2070 climate goals. 

The strategy comes at a time when MSMEs, contributing nearly 30 percent of India’s GDP, around 46 percent of exports, and over 25 percent of industrial energy consumption, are under increasing pressure to decarbonise to remain competitive globally.

This urgency is heightened by measures such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), which is set to impose carbon-linked costs on exports.

Three Key Levers for MSME Decarbonisation

The roadmap outlines three key levers to cut emissions and boost energy efficiency in the MSME sector. 

First, energy efficiency aims to reduce specific energy consumption by at least 20 percent through the adoption of efficient equipment and technologies, supported by financing models such as Pay As You Save (PAYS) via Energy Service Companies (ESCOs). 

Second, green electricity focuses on expanding renewable energy use, including rooftop solar under Renewable Energy Service Company (RESCO) models and green open access, to lower reliance on fossil fuels. 

Third, alternative fuels encourage a shift from high-emission sources like coal and pet coke to cleaner options such as natural gas, biomass, and compressed biogas, particularly in energy-intensive clusters.

Institutional Support and Funding Recommendations

To drive implementation, the roadmap proposes the creation of a National Project Management Agency (NPMA) to coordinate the green transition across MSME clusters, working with industry associations and state bodies. 

It also highlights the need for innovative financing mechanisms, including viability gap funding (VGF) of around Rs 6,000 crore and a PM Surya Ghar like capital subsidy scheme to accelerate the adoption of green technologies, particularly rooftop solar, in micro units. 

Emission Reduction Potential and Economic Benefits

The report suggests that scaling green electricity and cleaner fuels could cut 30–35 million tonnes of CO₂ emissions over the next decade, with broader measures potentially trimming 75–87 million tonnes, while mobilising over Rs 2 lakh crore in private investment and creating more than 55,000 green jobs. 

NITI Aayog emphasises that decarbonisation is critical not only for climate commitments but also for enhancing MSME competitiveness, both domestically and in international value chains. 

The roadmap aims to help MSMEs lower energy costs, improve resource efficiency, and unlock opportunities in climate aware markets while aligning with India’s broader climate and economic transformation agenda. 

(KNN Bureau)