|Project title||Sector||SCP practice|
|ACIDLOOP||Fabricated metals industry||Cleaner Production|
|ACMFN||Cross cutting issues||Cleaner Production|
|Agribusiness Access to Finance||Food and beverage||Creating Demand for Better Products|
|Eco-Jute||Textile and leather industry||Cleaner Production|
|Going Green||Textile and leather industry||Cleaner Production|
|Green Retail||Food and beverage||Creating Demand for Better Products, Sustainable Supply Chain Management|
|Lead Elimination Project||Chemical sector||Cleaner Production|
|MSME Clusters||Cross cutting issues, Fabricated metals industry||Cleaner Production|
|PRO-SUSTAIN||Textile and leather industry||Creating Demand for Better Products|
|Sustainable Auto-Rickshaw||Cleaner Production|
|SUSTEX||Textile and leather industry||Business and products for the poor, Product design for sustainability|
|WEEE Recycle||Electrical equipment industry, Utilities sector||Waste Management|
|Women-centered ICS||Cross cutting issues||Product design for sustainability|
|Wood Processing and Trade||Wood-based industry||Eco-labels, Sustainable Supply Chain Management|
Mr. Arun Kumar Mehta
Ministry of Environment, Forests, and Climate Change
Government of India
Under SWITCH-Asia’s Regional Policy Support Component, UNEP’s main partner in India is the Ministry of Environment, Forests and Climate Change. In 2016, the SWITCH-Asia RPSC will support the implementation of projects that aim to stimulate the demand and supply of sustainable products by combining eco-labelling and sustainable public procurement (SPP). The following areas have been identified as priority:
a. Providing capacity development and technical assistance to public and private sectors on the development of SPP policies and use of eco-labelling;
b. Assisting India in the coordinated implementation of sustainable public procurement policies and eco-labelling
Status of SCP policy framework
In recent decades, with the increasing prominence of Sustainable Consumption and Production (SCP) as an imperative for sustainable development, the Republic of India has made strides for the inclusion of SCP in national governance. Equally, the country has built upon intrinsic traditions towards resource efficiency, applying these into recent policies for cleaner production and climate resilient development.
India is clearly advanced and ahead of most countries in the region when it comes to governmental strategies, policies and regulations. At least on the production side, there is a fairly well-developed legal framework in place for environmental protection and to some extent for resource conservation. However, in general, existing policies pay little attention to the consumption of goods and services as a driver of resource use and pollution. Exceptions are water, land and energy where resource constraints are already having a negative impact on people’s quality of life and the prospects for future development. In these areas there are policies in place to promote efficiency and sound resource management. There is still though considerable room to improve these policies further, for example by strengthening the economic incentives for efficiency and by removing implementation barriers.
Intended Nationally Determined Contribution (INDC) to the UNFCC COP15
On 22 April 2016, India signed the Paris Agreement, committing to achieve its Intended Nationally Determined Contribution (INDC) to the United Nations Framework Convention on Climate Change COP 15. India’s INDC denotes various targets and commitments. The INDC also highlights the national policy framework for tackling environmental and sustainable growth challenges. It lays out priority areas in line with the current Government of India (GoI), according to mitigation and adaption strategies.
“‘Earth has enough resources to meet people’s needs, but will never have enough to satisfy people's greed’. We must promote sustainable production processes and also sustainable lifestyles across the globe. Habit and attitude are as much a part of the solution as Technology and Finance. . It must be understood that poverty is a big polluter; so is the extravagant way of life and a profligate pattern of consumerism a grave threat to environment” - INDC by Government of India, 2015.
The INDC’s Mitigation strategies focus on priorities such as: Clean and Efficient Energy in industries, climate resilient urbanization, promoting waste to wealth conversion (a large potential growth sector) and more. It also includes commitments on SAFE, SMART AND SUSTAINABLE GREEN TRANSPORTATION NETWORK, highlighting the country’s national policy on biofuels and more. The INDC’s priority area on abatement of pollution also highlights some of its newest policy achievements that will contribute to major national SCP challenges and contribute to a circular economy, such as in areas of air quality and waste effluent treatment – these include a new Fly Ash Utilisation Policy (for cleaner waste incineration plants), Zero Liquid Discharge (ZLD) standards for over 2000 industries to reduce water pollution and a new National Air Quality Index (AQI). These policies complement new initiatives to ensure Sustainable consumption and cleaner production for water resources, ensure a better quality of life and wellbeing for many of India’s poorest and urban marginalized populations, such as the Clean up the Ganga River programme to reinstate water quality for the renowned Ganges river.
The latter policies are also reflected in the INDC’s adaptation strategies, which focus on agricultural areas and more efficient use of water in industry as well. Notably, a National Bureau of Water Use Efficiency (NBWUE) has also been proposed for promoting and regulating the efficient use of water. Most notably though, an education and consumer information component is missing from the INDC, overlooking the importance of changing consumer preferences (unsustainable consumption trends) in India and the contribution of these as they move into middle-income status in the coming years. The INDC does note that a ‘Give It Up’ Campaign was launched “to encourage citizens to give up subsidy on cooking gas to meet the needs of the truly needy citizens, thereby promote shift away from inefficient use of biomass in rural areas”.
The following table summarises the key linkages amongst this National Policy Framework and SCP topics (See Table 1). All UNEP activities on policy engagement in India going forward will aim to contribute to the INDC and the achievement of the Sustainable Development Goals, as well as other expressed national priorities and policies of the Government of India.
Table 1. National Policy Framework on Environment and Development for SCP (INDC, 2015)
Related Policy Document
Constitution of India, Article 48-A
“The State shall endeavour to protect and improve the environment and to safeguard the forests and wildlife of the country”.
National Environment Policy (NEP), 2006
Mentions unsustainable consumption. Focus on Cleaner Production through Sections 5.2.8 Pollution Abatement & 5.4 Clean Technologies and Innovation. Also focus on demand-side areas for Sustainable Consumption. 5.3.2 Environmental Management Systems, Ecolabelling and Certification – ISO 14000 and Indian/Foreign Ecolabel implementation; 5.5 Environmental Awareness, Education, and Information commitments to consumer information and education. 5.8 Research and Development focus on ”technologies for environmental management and clean production”. Affirms polluter pays principle.
National Action Plan on Climate Change (NAPCC) (2008-2017)
Details potential Climate Change Mitigation and Adaptation priorities and actions. Implemented through eight National Missions: National Solar Mission, National Mission for Enhanced Energy Efficiency, National Mission on Sustainable Habitat (Energy efficiency in urbanization), National Water Mission (20% improvement in water use efficiency), National Mission for Sustaining the Himalayan Ecosystem (Water supply protection), National Mission for a “Green India” (afforest 33% of India), National Mission for Sustainable Agriculture, National Mission on Strategic Knowledge for Climate Change (science and finance). Steered by Prime Minister’s Council on Climate Change.
State Action Plan on Climate Change (SAPCC)
32 States and Union Territories have put in place policy to mainstream climate change concerns into state plans.
Energy Conservation Act
Efficient use of energy and energy conservation goals
National Policy for Farmers
Sustainable development of agricultural sector (SCP goals and water efficiency in sector) – sector is largest water consumer.
National Electricity Policy (NEP) /Integrated Energy Policy (IEP).
Electricity for All: focus on universalizing access to electricity and promoting renewable sources of energy
GoI Special New Policy Initiatives
Make in India – Zero Effect, Zero Defect (ZED)
Aims for reinvigorated Manufacturing sector, with commitment of “Zero EFFECT, Zero defect,” for reducing manufacturing impacts on water pollution, air quality, etc. INDC: “The Make in India campaign with ZED is a policy initiative to rate Medium & Small Industries on quality control and certification for energy efficiency, enhanced resources efficiency, pollution control, use of renewable energy, waste management etc. using ZED Maturity Assessment Model. The scheme launched in 2015, envisages coverage of about 1 million medium and small enterprises.”
100 SMART Cities Initiative and Challenge
100 smart cities projects will start in India, embedding considerations for cleaner production and sustainable lifestyles, among other SCP areas (e.g. on 10YFP Sustainable Buildings and Construction). 20 city winners have been announced.
E-Waste Management Rules
The Ministry of Environment, Forest and Climate Change adopted on 23 March 2016 a new law establishing Extended Producer Responsibility (EPP) in the sector of electrical or electronic waste (e-waste) (G.S.R. 338(E)). This law places new and more stringent responsibilities on manufacturers, producers, collection centres, dealers, e-retailers, refurbishers, consumers, bulk consumers, dismantlers and recyclers involved in the manufacture, sale, transfer, purchase, collection, storage and processing of e-waste. It provides for the collection and channelization of e-waste generated from ‘end-of-life’ products and for the pre-treatment of e-waste to immobilise mercury and reduce the volume of waste prior to disposal or storage. Under this new law, consumers have the obligation to ensure that e-waste generated by them is channelled through the appropriate collection centres, dealers, dismantlers or recyclers. The State Government is charged with ensuring the recognition and registration of workers involved in the dismantling and recycling of e-waste as well as the protecting their health and safety. Producers, manufacturers, dismantlers or recyclers are now required to obtain prior authorisation from the State Pollution Control Board for the generation of e-waste. The law also stipulates that the importation of electrical or electronic equipment will only be allowed to producers having received prior EPP authorisation. Furthermore, producers are also charged with ensuring that new equipment including their components, consumables, parts or spares do not contain dangerous metals beyond a maximum concentration value. Finally, manufacturers, producers, importers, transporters, refurbishers, dismantlers and recyclers can be held liable for damages caused to the environment or a third party due to improper handling or management of e-waste and may be liable to pay financial penalties.
In 2013, the Government of India updated the country’s corporate law to include several important provisions including the “2 percent” requirement which requires that businesses with annual revenues of more than 10bn rupees (£105m) spend “at least 2 percent of the average net profits of the company made during the three immediately preceding financial years” on Corporate Social Responsibility (CSR) activities. With this Act, India became the first country to mandate CSR. The adoption of this Act was a positive step forward in ensuring that business contributes to equitable and sustainable economic development.
12th National Five-Year Plan
At the overarching policy level, India develops and implements national Five-Year plans. These plans guide the policies of governmental institutions at both national and state level. The Planning Commission is the coordinating body in charge of developing the Five-Year plans.. India has made national policy advancements on SCP through the inclusion of SCP in its 12th Five Year Plan (2012-2017) which is currently being implemented. The plan denotes that “The issue of environmental sustainability cannot be ignored. We need a growth process that is consistent with protecting our environment” and it lays out specific financial instruments recommendations to ensure SCP – “economic instruments can help achieve sustainable development through their influence on behavioural patterns leading to sustainable consumption and production in the economy”. It also mentions other central concepts in SCP and resource efficiency, such as energy efficiency, cleaner production, greening procurement and more.
The 12FYP stresses the need for sound management and use of natural resource. The plan recalls the constraint of limitations of natural resources and the need to exploit these in a sustainable manner. Water and land are especially emphasized, as well as climate change.
National Plans and Strategies
India has a number of specific national plans and strategies. One of the most well-known and of the highest significance for SCP and RE is the National Action Plan on Climate Change (NAPCC) of 2008. The NAPCC identifies eight core National Missions:
- National Solar Mission, aiming to add 20 GW of solar power capacity,
- National Mission for Enhanced Energy Efficiency, aiming at saving 10 GW through improvements in industry, electric appliances, and buildings, and leading to fuel savings of at least 23 million tonnes of oil equivalent (toe) annually by 2014-15,
- National Mission on Sustainable Habitat, aiming at promoting energy efficiency through improved urban planning,
- National Water Mission, aiming at achieving 20 percent improvement in water use efficiency through water pricing and other measures,
- National Mission for Sustaining the Himalayan Ecosystem, aiming to protect ecological values in the Himalayan region,
- National Mission for a ‘Green India’, aiming to significantly increase forest cover and to rehabilitate degraded land and forests,
- National Mission for Sustainable Agriculture, aiming to climate-proof the country’s food production capacity,
- National Mission on Strategic Knowledge for Climate Change, aiming to stimulate scientific research related with climate change mitigation and adaptation
Additional National Level frameworks related to SCP
- National Mission for a Green India, 2011
- Integrated Energy Policy of 2008
- The National Innovation Act, 2008
- National Environmental Policy, 2006
- Biological Diversity Act, 2002
- Energy Conservation Act, 2001
- Environmental Protection Act, 1986
Consumer Protection Act, 1986
The Consumer Protection Act of 1986 defines consumer law in India. This legislation helps to protect consumers from any kind of exploitation by availing the means for hearing and considering and finally settling disputes. This Act stipulates the goods and service providers’ responsibilities. It also provides consumers the right to have accurate information about a product or service's quantity, purity, quality, standard and potency.
The Government of India has implemented the National Programme for Organic Production (hereinafter referred to as ‘NPOP’). The national programme involves the accreditation programme for Certification Bodies, standards for organic production, promotion of organic farming etc. The NPOP standards for production and accreditation system have been recognized by European Commission and Switzerland for unprocessed plant products as equivalent to their country standards. Similarly, USDA has recognized NPOP conformity assessment procedures of accreditation as equivalent to that of US. With these recognitions, Indian organic products duly certified by the accredited certification bodies of India are accepted by the importing countries.
Overseen by India’s Agricultural and Processed Food Products Export Development Authority (APEDA), the NPOP provides for Standards for organic production, systems, criteria and procedure for accreditation of Certification Bodies, the National (India Organic) Logo and the regulations governing its use. The standards and procedures have been formulated in harmony with other International Standards regulating import and export of organic products. This document also proposes to provide an institutional mechanism for the implementation of National Standards for Organic Production.
The Ministry of Water Resources, River Development & Ganga Rejuvenation is responsible for laying down policy guidelines and programmes for the development and regulation of country's water resources. As an attached office of the Ministry, the Central Water Commission is the premier Technical Organization of India in the field of Water Resources and is entrusted with the general responsibilities of initiating, coordinating and furthering in consultation of the State Governments concerned, schemes for control, conservation and utilization of water resources throughout the country, for purpose of Flood Control, Irrigation, Navigation, Drinking Water Supply and Water Power Development. It also undertakes the investigations, construction and execution of any such schemes as required.
The irrigation sector is the thrust area of Ministry of Water Resources, River Development & Ganga Rejuvenation. As such, a National Water Mission was unveiled by the Honourable Prime Minister of India on 30th June, 2008 under the National Action Plan on Climate Change. Five goals were identified under the National Water Mission. One of these five goals was to increase water use efficiency in all sectors by 20% before the year 2017 i.e. by the end of 12th Five Year Plan. In view of the National Water Mission, the Central Water Commission finalized “Guidelines for Improving Water Use Efficiency in Irrigation, Domestic & Industrial Sectors” which were adopted by the Ministry of Water Resources in November 2014.
National Development Agenda
The National Institution for Transforming India, also called NITI Aayog, was formed via a resolution of the Union Cabinet on January 1, 2015. The Government of India, in keeping with its reform agenda, constituted the NITI Aayog to replace the Planning Commission previously responsible for the elaboration of Five-Year Plans. The -old five-year plans will now make way for a larger and more focused 15-year National Development Agenda that will be implemented after the last of the five-year plans, the 12th (2012-17) ends next year.
NITI Aayog is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs. While designing strategic and long term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States.
Sustainable Development Goals (SDGs) of the 2030 Agenda
NITI Aayog has been entrusted with the role to co-ordinate ‘Transforming our world: the 2030 Agenda for Sustainable Development’ (called as SDGs) for which India, represented by the Honorable Prime Minister Narendra Modi, has committed to achieve at the UN Summit meet 25-27 September 2015.
The task at hand for NITI Aayog is not merely to periodically collect data on SDGs but to act proactively fructify the goals and targets not only quantitatively but also maintaining high standards of quality. The Ministry of Statistics and Programme Implementation (MoSPI) has already undertaken a parallel exercise of interaction with the ministries to evolve indicators reflecting the SDG goals and targets.
To achieve these tasks, the draft mapping of the goals and targets as an initial step on proposed Nodal and other Ministries has been carried out in consultation with MoSPI. Further, as an illustration, the Centrally Sponsored Schemes (CSSs), including the ‘core of the core’, ‘core’ and ‘optional’ Schemes being implemented by the States have been mapped along with some of the recent initiatives undertaken by the Central Government. In addition, Ministries are implementing Central Sector Schemes and States are also implementing various State Schemes aligned with one or more SDGs.
 INDC, 2015. Government of India. Online at: http://www4.unfccc.int/submissions/INDC/Published%20Documents/India/1/INDIA%20INDC%20TO%20UNFCCC.pdf
 GoI will initially finance these first 20 cities as winners of the Smart cities challenge. http://smartcitieschallenge.in/recentnews/first-winners-of-the-smart-cities-challenge-announced
Resource consumption and production
As India successfully continues on its development path, the disposable income of consumer households will also increase. Consumer preferences will change as a greater number of households increase their purchasing power. In most cases, economies denote this trend as a successful indicator of economic growth and development, as it should be. However, with increases in consumption also come increasing amounts of waste generation, and other considerations that could be addressed through SCP policies, embedding circular economy concepts or life cycle aprpoaches as well.
Current household expenditure trends from the Reserve Bank of India’s time-series data on expenditure show that as the economy has grown, expenditures have risen most sharply for transport and communications (e.g. automobiles and mobile phones), food, as well as a sharp rise for other personal care goods and services.
A last trend to factor into sustainable consumption strategies and policies for the country is urbanization and rural to urban migration rates. It is expected that about urban populations will increase from 30% currently to 40% by 2030. According to India’s INDC, as population expands and incomes grow, this shift will likely be realized alongside demographic changes that will exponentially increase the demand for urban amenities like housing, energy, transport, water, and waste disposal. This echoes current trends above that will signal environmental pressures due to waste management challenges, transport impacts, a need for energy and water and resource efficient technologies. In addition, these trends all point to the need for greater resource efficient behaviors and practices among the three consumption actors - government, businesses, and households – which will all need to adopt energy efficient, water efficient and recycling/reuse behaviors as the economy grows.
Currently, United Nations member states are also deliberating on key indicators to assess SCP and resource efficiency under the Sustainable Development Goals (SDGs). According to recent reports, there are 229 Indicators proposed with 149 “green” or likely indicators and 80 “grey”, which are still undergoing feasibility review. These latest briefings denote that Member States’ national statistical systems will develop indicators at sub-national and national levels to be aggregated into sub-regional and regional datasets, and into global annual reports. These processes will take into account national circumstances.
The previous 2010 resource consumption and resource efficiency indicators provided the following overview:
 Briefing to the General Assembly (UNGA) on the global SDG indicator framework by the IAEG-SDGs Working Group, New York. 28, January 2016. http://unstats.un.org/sdgs/files/ga-briefing-28-Jan-2016/PGA-Briefing--Status-of-IAEG-SDGs-work-on-global-SDG-indicators-28-Jan-2016.pdf
Main Resource Consumption and Resource Efficiency Indicators (2010)
|Subject Area||Total||Per person||Per USD$ of GDP|
|Domestic Material Consumption, DMC
(tonnes, tonnes per capita, kgr per 1USD$)
(kilotonnes,tonnes per capita, kgr per 1USD$) )
|Total Primary Energy Supply, TPES
(Petajoules, Gigajoules per capita, Megajoules per 1USD$)
(Trillion litres, Kilolitres per capita, Litres per 1USD$)
|Population density 2015 (UNESA 2012 revision), population per sq.km||390|
|GDP per capita (USD), 2013 WB||1,497.50|
|HDI Rank (2013) UNDP||0.586|
|Arable land (hectares per person) WB||2012 0.13|
|Forest cover in % (2010), UNSTATS||23|
|Material intensity (2010)UNEP||4.01|
|Per-capita energy use (kg of oil equivalent per capita) 2011, WB||614|
|Energy intensity (total primary energy consumption per USD of GDP) 2011, EIA||17,485.68|
|GHG intensity (2010) UNEP||2.21|
|CO2 emissions (metric tone per capita), 2010, WB||1.7|
|Number of Middle Class consumers % (2010), ADB||25|
|Number of people with income < 2USD/day (PPP, USD, %), 2010, ADB||75|
Trends in Resource Consumption and Resource Efficiency Indicators (1970-2010)
In panel a) India’s GDP has grown much faster than the other four overview indicators, indicating decreasing material and energy intensity, with relative decoupling of growth from DMC. Continued and rapid growth in both total DMC and TPES show that no absolute decoupling has been achieved. Panel b) shows India’s local extraction of non-biomass materials has escalated to meet the requirements of its rapidly growing economy. Panel c) shows India’s total material footprint is lower than DE by itself, and so India’s quite low level of per capita extraction is nonetheless in part used to satisfy external demand for primary resources, via embodiment in trade. Panels d), e) and f) confirm the trends for material, energy, and GHG intensities, and per capita, that we would expect from panel a) i.e. all intensities are decreasing quite strongly and consistently. Panels d) and e) show that footprint based measures of materials and energy consumption are lower than traditional DMC and TPES based ones for India, while in panel f) the reverse is generally the case.
(Source: UNEP CSIRO Indicators for a Resource Efficient and Green Asia and the Pacific, 2015).
Key references relevant to SCP
- An approach to the 12th Five-Year Plan, 2012-2017. Government of India, Planning Commission, October 2011
- State of Environment Report, Ministry of Environment and Forests Government of India, 2009
- SWITCH-Asia RPSC SCP Policy Needs Assessment, 2011.
UNEP's relevant activities
The information in the country profiles herein have been obtained through research with firsthand and secondhand sources. The information presented herein cannot be considered as official policy of governments or other official bodies. The SWITCH-Asia Programme cannot be held responsible for the content of the sites to which it provides links or for the availability of servers or links. Information is being continuously updated in order to maintain an up to date country profile. If you would like to contribute information for this profile or have any further comments, please send an email to: SWITCH-PSC@unep.org
India's population is growing. By the mid of this century, India will have surpassed China as the most populated country in the world. To feed the additional hundreds of millions of people, to provide jobs for youths and to ensure a decent standard of living the Indian economy needs to grow rapidly. Yet, to prevent that this economic growth results in even more overcrowding of cities, inadequate infrastructure, polluted air and water, the push for economic growth needs to go in hand with the push for sustainable consumption and production (SCP) practices. Especially small and medium-sized enterprises (SMEs) need to be encouraged and supported in adopting SCP practices as they - as elsewhere - form the backbone of the country's economy. Such support includes technical support and capacity building but also access to finance for implementing SCP measures.
The Indian Government has acknowledged this need and has implemented several policies that encourage SMEs to adopt energy efficient processes, less polluting practices and alternative energy solutions. Noteworthy policies in this regard are the National Solar Mission (NSM) with an ambitious target of installing 20 gigawatt (GW) of solar power capacity by 2022, and the National Mission for Enhanced Energy Efficiency (NMEEE) with a target to reduce energy consumption by 5% by 2015. These are economy-wide policies, but they enable SMEs to provide and adopt SCP solutions, thus creating a SCP project pipeline. This has, in turn, led to initiatives from financial institutions to provide for loan and equity to meet these needs. Further environmental policies, particularly in the area of pollution control, have additionally required SMEs to undergo Environment Impact Assessments. If a company does not meet the required standards, it faces severe charges up to a closure or relocation of the production facility. The need for complying with regulation therefore also creates some demand for green finance. Yet, in general the actual enforcement of environmental pollution control regulations remain low.
The Small Industries Development Bank of India (SIDBI) has introduced several credit lines for energy efficiency and cleaner production. India has also been a destination for international impact investors. Several investors have invested in green and inclusive businesses in India, particularly in the area of clean energy and water access for disadvantaged parts of the population.
However, given the importance of SMEs to India's economy, and in turn, their relevance for a transition towards stronger SCP patterns, further technical, financial and knowledge support for SMEs is needed. Only strong SMEs can develop a relevant SCP project pipeline and ensure sufficient demand for green financing products. At the same time the ability of India's financial institutions to provide SMEs financing for green investments must be strengthened.
Key challenges for Green Financing in India
A major problem still is that a lot of financing dedicated to green investments - especially in the renewable energy sector - is still geared towards large projects. SME green financing is not a priority of most financial institutions.
Besides access to finance for any type of company to invest in SCP measures, India also needs to support SMEs developing and marketing green technologies more strongly. Although, India has a vibrant venture capital and start-up scene, the majority of Indian venture capital, has been targeted to sectors such as information technology, consumer internet services and e-commerce. There are only three venture capital funds - INFUSE, Global Environment Fund (not to be confused with the Global Environment Facility) and Green India Venture Fund - which focus solely on the green technology sector. Funding available through Indian incubators is too small to develop green technology products and services. This discourages innovation in green technologies.
The problems of green finance in India are, in the overall context, the problems of SME finance in India. Despite India's large and well-developed financial system and its consideration of SME financing as a policy issue, SMEs face severe challenges in accessing finance for any type of investments. This resembles the situation in almost every other Asian country. The primary reason for the inability of SMEs to access finance is the collateral security requirement of banks (even with the existence of a credit guarantee scheme). Almost as important is the fact that only 6% of SMEs are registered. Non-Banking Financial Companies (NBFCs) which have the potential to fill the void have been restricted by rules on leasing and asset finance.
Main institutions providing Green Finance
A prominent role in terms of access to green finance for SMEs is played by the Small Industries Development Bank of India (SIDBI). It is the principal financial institution for SMEs in India and has been at the forefront of providing green finance to SMEs. With support from bilateral institutions such as KfW, JICA and AfD, SIDBI has introduced several credit lines for energy efficiency and cleaner production. Financing for many of these projects has moved beyond the support provided by international development finance organisations and is now part of SIDBI's mainstream business.
Infuse Ventures is a capital firm specialised in supporting clean technology entrepreneurship. It provides business and mentoring support as well as seed and early-stage capital. The Renewables Seed Programme is supported by the Ministry of New and Renewable Energy (Government of India) and promotes to adoption of renewable energy in India through new IT, financial model and product innovations.
Other institutions providing Green Finance in India are:
Bureau of Energy Efficiency (BEE)
Japan International Cooperation Agency (JICA)
Indian Renewable Energy Development Agency Ltd (IREDA)
Punjab National Bank
Bank of Baroda
IFCI Venture Capital Funds Ltd.
Department of Electronics and Information (DeitY)
Ministry of Communications & IT
Venture East Fund Advisors (India) Ltd
Blume Venture Advisors Pvt. Ltd
Centre for Innovation Incubation and Entrepreneurship (CIIE)
IFCI Venture Capital Funds Ltd
Green India venture fund (GIVF)
Global Environment Fund
Fidelity Growth Partners
Aavishkar India Micro VC Fund
Friends of Women's World Banking India (FWWB-I)
Oikocredit Maanaveeya Development
Finance Limited MDFL
Saija Finance Pvt. Ltd
United Nations Industrial Development Organisation (UNIDO)
Global Environment Facility (GEF)