India

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

Focal point

Mr. Arun Kumar Mehta

Joint Secretary 

Ministry of Environment, Forests, and Climate Change

Government of India

SWITCH-Asia RPSC

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”.[1]

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

Description

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.[2]

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. 

The Companies Act, 2013

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.

Organic Agriculture

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.

Guidelines for Improving Water Use Efficiency in Irrigation, Domestic & Industrial Sectors

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.

12th National Five Year Plan

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. 


[1] INDC, 2015. Government of India. Online at: http://www4.unfccc.int/submissions/INDC/Published%20Documents/India/1/INDIA%20INDC%20TO%20UNFCCC.pdf

[2] 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.[1]  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:


[1] 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)

Population (millions) 1,205.625
GDP (billion USD) 1,251.810
GDP is in USD exchange rate based on year 2005 and deflated.
Source: UNSD database.
Subject Area Total Per person Per USD$ of GDP
Domestic Material Consumption, DMC
(tonnes, tonnes per capita, kgr per 1USD$)
5,022,333,439 4.17 4.01
GHG emissions
(kilotonnes,tonnes per capita, kgr per 1USD$) )
2,771,456 2.30 2.21
Total Primary Energy Supply, TPES
(Petajoules, Gigajoules per capita, Megajoules per 1USD$)
30,251 25.09 24.17
Water Use
(Trillion litres, Kilolitres per capita, Litres per 1USD$)
761 631.21 607.92
Subject Area Indicator
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)

DE: Domestic Extraction;
MI: Material Intensity of the economy;
MF: Material Footprint.
All other abbreviations explained in the table above

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

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

Status

Introduction

The small- and medium-sized enterprise (SME) sector in India contributes about 8% of the GDP and accounts for 45% of industrial output and 40% of exports. There are approximately 46 million SMEs, employing about 106 mil­lion people (Ministry of MSME n.d.a). Only 6% of the SME sector is formally registered with the Registrar of Com­panies – the remaining 94% are unregistered enterprises (Ministry of MSME n.d.b).

 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 support the additional hundreds of millions of people, the 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 necessitates the push for sustainable consumption and production (SCP) practices.

 The Indian Government has implemented several policies that encourage SMEs to adopt energy efficient processes, less polluting practices and alternative energy solutions, such as:

  1.  National Solar Mission (NSM): has an ambitious target of installing 20 gigawatt (GW) of solar power capacity by 2022 
  2.  National Mission for Enhanced Energy Efficiency (NMEEE): has a target to reduce energy consumption by 5% by 2015

Positive effects of green SME policies

• Enabled SMEs to provide and adopt SCP solutions, thus creating a SCP project pipeline, which has led to initiatives from financial institutions to provide for loan and equity to meet these needs.

• Financial institutions have provided for loan and equity to meet SCP needs.

• Further environmental policies have additionally required SMEs to undergo Environment Impact Assess¬ments. 

• Companies face severe charges up to a closure or relocation of the production facility if they do not meet required standards. 

• SME clusters in Kolkata (leather and castings), Agra (castings), Kanpur (leather) and Tiru¬pur (dyeing) have been forced to shut down and relocate due to non-compliance with the pollution control laws (Planning Commission n.d.). 

Suggestions for strengthening green and Sustainable Consumption and Production practices in Indian SMEs

• Further technical, financial and knowledge support for SMEs in transitioning towards stronger SCP patterns. 

• Greater support for SMEs in developing and marketing green technologies.

• Strengthen financial institutions’ abilities to provide SMEs financing for green investments.

• Develop a strong public policy driven agenda to make it easier to do business and particularly for SMEs to be registered and to become part of the formal financial ambit. 

• Create more awareness on green business practices both among large companies and consumers, who are the customers of the SMEs. 

• Focus more on innovation, including research and development and incubation of enterprises in green technology sectors.

Challenges

• Risk aversion of banks and high collateral require¬ments restricts the provision of loans to SMEs 

• Only 6% of SMEs are registered; the informality of SMEs makes it difficult for them to access financing 

• Non-Banking Financial Companies (NBFCs) have been restricted by rules on leasing and asset finance

• Application procedures are cumbersome for SMEs

• Financial institutions are often unfamiliar with green technologies

• Venture capital and private equity investors do not have the investment horizon required for green financing

• SMEs are not aware of the benefits of greening their production

• SMEs lack knowledge on particular financing schemes as well as green financing schemes 

• SMEs often have to provide upfront finance for sell¬ing their green products 

• Most financing dedicated to green investments, especially in the renewable energy sector, is still geared towards large projects and not SMEs.

Providers of green finance in India

  • The Small Industries Development Bank of India (SIDBI) is the principal financial institu¬tion for SMEs in India and has been at the forefront of providing green finance to SMEs. With support from bi¬lateral 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 international development finance support and is now part of SIDBI’s mainstream business. 
  • Several international impact 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. 
  • There are 27 public sector banks providing the majority of financing services to SMEs. These banks in particular would need to increase their share of financing to SMEs targeted at green investments. Currently only five banks have specific energy efficiency financing products and none have loans for pollution control and cleaner produc¬tion measures. 
  • Only three venture capital funds – INFUSE, Global Environ¬ment Fund (not to be confused with the Global Environ¬ment Facility), and Green India Venture Fund focus solely on the green technology sector. 
  • Funding available through Indian incubators is too small to develop green technology products and services, which discourages inno¬vation in green technologies.

Government institutions for cooperation

• The Office of the Development Commissioner Ministry of Micro, Small, and Medium Enterprises  (DCMSME)

• Small & Medium Business Development Chamber of India (SME Chamber of India) 

• The Confederation of Indian Industry (CII)  (non-government)

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
  • Canara 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)
  • IIM Ahmedabad
  • IFCI Venture Capital Funds Ltd
  • Green India venture fund (GIVF)
  • Global Environment Fund
  • Fidelity Growth Partners
  • Peepul Capital
  • Aavishkar India Micro VC Fund
  • Friends of Women's World Banking India (FWWB-I)
  • Oikocredit Maanaveeya Development
  • Finance Limited MDFL
  • Saija Finance Pvt. Ltd
  • KfW
  • United Nations Industrial Development Organisation (UNIDO)
  • Global Environment Facility (GEF)

New financing for SMEs

The India Innovation Lab for Green Finance: a private-public initiative aimed to develop and implement innovative ideas for scaling up green financing in India.

Loans4SMEs: A financing facility that would provide debt financing to small and medium enterprises (SMEs) for renewable energy and energy efficiency initiatives. Peer to peer lending platform for SMEs to unlock new capital. Focused on off-grid renewable energy, (renewable) energy service companies (ESCOs, RESCOs), energy efficiency.

Additional Financing for Financing Energy Efficiency at MSMEs Project: by the World Bank, supports SMEs to reduce GHG emissions through Energy Efficiency and investments resulting in energy savings. Total project cost of EUR 28.33 Million 

Status and policies

GHG emissions data

2015 total territorial GHG emissions (excluding land use change and forestry): 2,274 MtCO2

2015 territorial GHG emissions per capita:  1.7 tCO2/person

2014 CO2 consumption emissions:2 1,969 MtCO

*GHG territorial emissions are Carbon dioxide emissions from the use of coal, oil and gas (combustion and industrial processes), the process of gas flaring and the manufacture of cement. 


[1] http://www.globalcarbonatlas.org/en/CO2-emissions
[2] Carbon dioxide emissions occurring anywhere in the world attributed to the country in which goods and services are consumed. For more information see: Section 2.1.2, The global carbon budget 1959-2015, Le Quéré et al. 2016.

GDP

2015 GDP: EUR 2.12 trillion

GDP composition by sector:1

  • Agriculture: 16.5%
  • Industry: 29.8%
  • Services: 45.4% 

Agricultural products:2 rice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fish

Industry subsectors: textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals 


 

[1] www.cia.gov/library/publications/the-world-factbook/geos/in.html[2]&nbsp;https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

 

 

Industries' contribution to climate change

According to India’s first Biennial Update Report to the UNFCCC in 2015, India’s gross emissions of Greenhouse Gases were 2.136 billion tons CO2e in 2010. The report also found that the emission intensity of GDP had reduced by 12% from 2005 to 2010, on track to meet India’s voluntary target of 20-25% reduction in emission intensity of GDP by 2020.

Contributions of GHG emissions by sector:[1]

  • Energy sector: 71%
  • IPPU (Industrial Processes and Product Use): 8%
  • Agriculture: 18%
  • Waste sector: 3%

Carbon dioxide (CO2) emissions dominate the total GHG emissions, with methane (CH4), and nitrous oxide (N2O) emissions from the agriculture and livestock sector, while emissions from the IPPU sector were predominantly from chemical and metal production.[2] With such high emission from the energy sector, India would reap high mitigation benefits by increasing renewable energy use, such as solar, wind, and hydropower energy, which is already a government focus.

Around 48% of the total energy consumption of the in­dustrial sector is used by SMEs (Jain 2011). It is estimated that SMEs’ energy consumption can be reduced by more than 25% through energy conservation and energy effi­ciency measures (Srijan 2011). Compared to large compa­nies, SMEs have an energy saving potential that is about 15-20% higher (DIE 2015).

  • Help SMEs adopt cleaner technologies and production processes
  • Reduce air and water pollution
  • Energy efficiency and energy savings
  • Improve water efficiency, reducing water wastage
  • Build resilience in agriculture through climate smart agriculture techniques
  •  Expand the use of renewable energy /electrification especially to rural areas, increasing labor productivity
  • Raise awareness and build capacities on SCP and its benefits

[1] http://unfccc.int/resource/docs/natc/indbur1.pdf
[2] http://www.dnaindia.com/money/report-energy-sector-emits-70-of-country-s-greenhouse-gases-2169900

Climate change policies

National policies: 

  1. National Action Plan on Climate Change (NAPCC) 2008 – 2017
  2. State Action Plan on Climate Change (SAPCC)
  3.  National Electricity Plan (Generation) 2012

 

International mitigation targets:

  • Ratified UNFCCC in 1993
  • Ratified Kyoto Protocol in 2002
  • Ratified Paris Agreement 2016

 

India’s INDC[1] to the United Nations Framework Convention on Climate Change (UNFCCC) 2015 

  • To reduce the emissions intensity of its GDP by 33% to 35% by 2030 from the 2005 level
  • To achieve about 40% cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030.
  • To create an additional carbon sink of 2.5 to 3 billion tons of CO2 equivalent through additional forest and tree cover by 2030.

 

Government financing for climate change related initiatives:

·      National Adaptation Fund[2] with an initial allocation USD 55.6 million to combat the adaptation needs in sectors like agriculture, water, forestry etc.

·      Expansion of U.S.-India Partnership to Advance Clean Energy (PACE) to include a new track on smart grids and energy storage under the U.S.-India Joint Clean Energy Research and Development Center (PACE-R)[3], a USD 125 million program jointly funded by the U.S. and Indian governments and private sector.


[1] Intended Nationally Determined Contribution. More information on INDCs here: http://unfccc.int/focus/indc_portal/items/8766.php
[2] India's INDC 2015 pg. 27
[3] https://www.whitehouse.gov/the-press-office/2015/01/25/fact-sheet-us-and-india-climate-and-clean-energy-cooperation

Climate change adaptation efforts

“India’s expenditure on programs with critical adaptation components has increased from 1.45% of GDP in 2000-01 to 2.82% during 2009-10.” INDC 2015

India’s INDC include an adaptation component, focusing on:

• Agriculture: building resilience by improving cultivation methods, enhancing natural resource management, water resource management, increasing crop production, and implementing agroforestry methods through the National Agroforestry Policy (NAP).

• Water: conserve water; enhance water use efficiency, implement rainwater harvesting to replenish groundwater sources, and strengthen flood management mechanisms in flood prone areas. 

• Health: manage the adverse climate change impacts on health, carry out the Integrated Disease Surveillance Programme (IDSP), National Vector Borne Disease Control Programme (NVBDCP) to deal with vector borne diseases like malaria, dengue etc. 

• Coastal regions: Implementing Integrated Coastal Zone Management  (ICZM) for ecological management and conservation, and ensure livelihood security of those living in coastal areas 

• Disaster Risk management: reduce vulnerabilities, improve early warning systems and communications, improve access and evacuation, and enhance communities’ capacities in disaster response. 

• Biodiversity and Himalayan: protecting its 4 out of 34 global biodiversity hotspots. The National Mission for Sustaining the Himalayan Ecosystem (NMSHE) addresses issues with glaciers and engages in biodiversity and wildlife conservation in the Himalayan ecosystem. 

• Rural livelihoods security: strengthening resilient capacity of rural communities. 

• State Action Plans on Climate Change: the 29 states and 7 Union Territories in India have all created plans on dealing with climate change based on local needs. 

Initial estimates state that India needs around EUR 182 billion (at 2014-15 prices) between 2015 and 2030 to implement adaptation measures, with additional finance needed for disaster management and resilience-building.

Current agricultural adaptation projects: 

1. Climate Change Adaptation (CCA) Project by the Watershed Organisation Trust’s (WOTR): works with farmers on watershed management, which includes water budgeting, crop planning, adaptive and sustainable agronomic practices, and irrigation management.

2. National Innovations in Climate Resilient Agriculture (NICRA) is a network project of Indian Council of Agricultural Research (ICAR) to improve the resilience of India’s agriculture and improve capacity building.  

Climate change impacts

India is exposed to many climate change impacts, compounded by socio-economic issues such as poverty and rapid population growth, which has stressed services and infrastructure in cities. India is the second most populated country in the world with 1.26 billion people1, and urban areas will be at high-risk from floods and high temperatures that will increase death, illness, and displacement. Illnesses such as malaria are linked to rainfall patterns, which are linked to climate changes.2 Climate change impact disproportionately affects poor populations since they have lower adaptive capacities. 161 million people, or 12.8% of its population live under the poverty line.3 India also faces the challenge of energy demands and has an energy deficit, with 77 million people having no access to electricity at all. India’s government has launched many plans for energy access and renewable energy.

Main climate change impacts include:

  • Extreme heat
  • Changing rainfall patterns
  • Droughts
  •  Floods
  • Groundwater scarcity
  • Glacier melt
  • Sea level rise
  • Salinity intrusion
  • Food security
  • Energy security
  • Biodiversity loss
  • Disease and health issues
  • Migration and conflict

[1] https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
[2] http://www.mea.gov.in/distinguished-lectures-detail.htm?356
[3] http://www.thehindu.com/news/national/world-bank-estimates-show-fall-in-indias-poverty-rate/article7727591.ece

Economic, social, and environmental impacts of climate change

Small and Medium-sized Enterprises (SMEs):

  • Extreme events like floods and storms damage infrastructure and facilities.
  • Interruptions to business transactions.
  • Transport and logistics routes are damaged or disrupted.
  • Heightened price and market volatility
  • Impacts on employees and consumers – lack of access to basic goods and services. 
  • Lack of water and energy availability affect operations and productions. 
  • Health issues from heat waves and increase of disease will cause decreases in labor and work production. 

Agriculture:

  •  Two thirds of the population in India relies on agriculture for livelihoods and accounts for 40% of the country’s total food production.
  • India needs to produce an additional 100 million tons of food grains by 2030 to feed their growing population.  
  • Extremely high temperatures in northern India, above 34°C, have had a significant negative effect on wheat yields.[1]
  • Rising temperatures with lower rainfall at the end of the growing season have caused a significant loss in India’s rice production.
  •  Over 40 million hectares of area is prone to floods; and the average area affected by floods annually is about 8 million hectares; 68% of the area is susceptible to drought.
  •   Rice production losses during severe droughts in three states of Jharkhand, Odisha, and Chhattisgarh alone were estimated at EUR 755 million.[2]
  •   Sea level rise increases instances of cyclones and flooding and leads to salinization of water resources and land; reducing soil productivity.

 Fisheries:

  • India is a top fish producer on a global scale, contributing 5% to the agriculture GDP
  • Fishing is a source of livelihood for about 14 million people.[1]
  • Rising sea temperatures changes distribution of fish and lowers fish fertility.
  • Coral bleaching occurs due to ocean acidification, destroying marine ecosystems and important fishing grounds.
  • Loss of mangroves destroys habitats.

[1] https://www.icor.org.in/pdfs/Impact-of-climate-change-Dr-Deshmukh.pdf

Infrastructure:

  •  Floods and salt-water intrusion will damage building foundations.
  •  India's annual average flood damage during the period 1996-2005 was EUR 711 million.[4]
  •  40 million Indians will be at risk from rising sea levels by 2050, with Mumbai and Kolkata most at risk for coastal flooding.
  •  Materials in low-lying areas will be damaged.
  • Transportation systems will be disrupted and damaged.
  •  High temperatures may affect machinery and construction.
  •  Tourism infrastructure will be negatively impacted.  

Water resources:

  • Decrease of freshwater sources for drinking and sanitation
  • Shorter monsoon periods and drought has reduced groundwater supplies
  • Chemical fertilizer has deteriorated water supplies.

 Health:

  •  Increase in infectious and waterborne diseases, particularly malaria and leptospirosis.
  •  Workers in heat-exposed jobs, especially outdoor jobs or agriculture have already been and will continue to be impacted by rising temperatures and heat-related illness.
  •  Occupational health hazards will increase.

[1] http://www.worldbank.org/en/news/feature/2013/06/19/india-climate-change-impacts
[2] https://intpolicydigest.org/2016/08/22/climate-change-and-indian-agriculture/
[3] https://www.icor.org.in/pdfs/Impact-of-climate-change-Dr-Deshmukh.pdf
[4] India INDC 2015

International cooperation on climate change

 

Status: 2017. Inclusive of grants and loans; not an exhaustible list.

     

Partner

No. of Projects

Program /Areas of focus

Funding Amount

Duration

Funding Sources

Global Environment Facility

95

Biodiversity, Climate change, land degradation, chemicals and waste

€765.34

Million

 

Ongoing

GEF Trust Fund

 

UNDP

1

Implementation of Rural Sanitation Initiatives for Ganga Rejuvenation in Jharkhand

€17 Million

2016-2019

Government of India Ministry of Water Resources, UNDP

World Bank

 

2

Program for Results

Grid-connected Rooftop Solar Program

€494 Million

2016-2021

World Bank

Second Phase of the National Cyclone Risk Mitigation Project

€290.92Million

2015-2021

USAID Global Climate Change Program

Various

Adaptation, clean energy, sustainable landscapes

€13.2 Million

Ongoing

USAID

 

 

 

 

 

 

 

 

 

 

Adaptation Fund

 

 

 

 

 

 

 

 

 

 

6

Building Adaptive Capacities in Communities, Livelihoods and Ecological Security in the Kanha-Pench Corridor in Madhya Pradesh

€2.36 Million

2016-2021

 

 

 

 

Adaptation Fund

Building Adaptive Capacities of Small Inland Fishers for Climate Resilience and Livelihood Security in Madhya Pradesh

 €1.60 Million

2015-2018

Climate Smart Actions and Strategies in North Western Himalayan Region for sustainable livelihoods of agriculture – dependent hill communities

€915,811

2015-2019

Climate Proofing of Watershed Development Projects in the States of Rajasthan and Tamil Nadu

€0.94 Million

2015-2018

Enhancing Adaptive Capacity and Increasing Resilience of Small and Marginal Farmers in Purulia and Bankura Districts of West Bengal

€2.36 Milion

2015-2019

 

Conservation and Management of Coastal Resources as a Potential Adaptation Strategy for Sea Level Rise

€651,047

 

2015 - 2019

 

Asian Development Bank (ADB)

2

Strengthening Climate Change Resilience in Urban India - Supporting Climate Change-Resilient Smart Cities Mission Projects (Subproject 2)

€2.36 Million

2017-2018

Urban Climate Change Resilience Trust Fund under the Urban Financing Partnership Facility

 

Climate Adaptation in Vennar Subbasin in Cauvery Delta Project

€94.45 Million

2016-2021

ADB

Climate Investment Funds

2

Solar Rooftop Investment Program Guaranteed by India

€160.57Million

2016 – ongoing

Climate Investment Fund

Solar Power Transmission Sector Project

€47.27 Million

2016 – ongoing

International Climate Initiative (IKI)

48

biodiversity, low carbon development, mitigation and adaptation, clean energy, green banking

Millions

Ongoing

German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)

UN REDD Program

Various

REDD+-related activities

and climate change

Millions

Ongoing

UN REDD, Forest Carbon Partnership Facility

 

 

Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ)

 

 

 

6

Integration of Renewable Energies into the Indian Electricity System

€ 1.977 Million

2014-2018

 

 

Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)

Climate Change Adaptation in Industrial Areas

€2.5 Million

2014-2018

Conservation and sustainable use of Biodiversity in India

€12.5 Million

2012-2020

Support to the National Instiute for Climate Change Studies and Actions (NICCSA)

€4 Million

2016 - 2020

Development and Management of NAMAs in India

€3 Million

2013-2017

Sustainable Management of Coastal and Marine Protected Areas

 

€9.8 Million

2012-2017