Context

• India's ambitions of Make-in-India, Viksit Bharat 2047, and net-zero emissions by 2070 require a careful balance between industrial growth and environmental sustainability.
• As manufacturing expands, energy demand and greenhouse gas emissions rise significantly.
• Since the industrial sector contributes a major share of national emissions, industrial decarbonisation has become central to India's long-term climate strategy.
• However, achieving meaningful emission reductions requires addressing important gaps in the current policy framework.

Industrial Emissions and Economic Growth

• Industrial development remains a key driver of economic progress, employment generation, and infrastructure expansion.
• At the same time, it increases dependence on energy-intensive processes. According to India's Biennial Transparency Report (BTR1), more than 20% of national emissions originate from industry.
• Of this, manufacturing industries and construction account for 13% through fuel consumption, while industrial processes and product use contribute another 9%.
• These figures highlight the significant role of industry in shaping India's overall carbon footprint. Consequently, reducing emissions from this sector is essential for meeting both development and climate objectives.

Existing Mitigation Policies

• India has adopted several market-based mechanisms to improve energy efficiency and reduce industrial emissions.
• The Perform, Achieve and Trade (PAT) scheme targets energy-intensive sectors by encouraging efficient energy use.
• It is gradually transitioning into the Carbon Credit Trading Scheme (CCTS), which focuses on reducing emission intensity in sectors such as aluminium, cement, fertilizers, iron and steel, petrochemicals, petroleum refining, pulp and paper, textiles, and chlor-alkali.
• These mechanisms establish benchmarks, create incentives for cleaner production, and support the transition toward a low-carbon economy. However, their effectiveness is limited by the sectors they cover.

The Policy Gap: Non-Specific Industries

• A major challenge lies in the large share of emissions classified under non-specific industries.
• Emissions data from manufacturing and construction indicate that identified industrial sectors account for slightly more than 55% of sectoral emissions, while over 40% fall under this broad and undefined category.
• The absence of clear sub-sectoral classification creates an administrative and regulatory blind spot.
• While sectors such as cement, steel, chemicals, and textiles are covered by PAT and CCTS, industries grouped under non-specific industries remain largely outside these frameworks.
• As a result, a substantial portion of India's industrial emissions is not subject to the same emission-reduction targets, monitoring mechanisms, or efficiency standards.
• This gap weakens the effectiveness of India's broader climate strategy and slows the country's green transition.

The Path Forward

• Need to Identify Industries
  • Achieving sustainable industrial growth requires greater transparency, detailed emissions data, and improved sectoral classification.
  • Breaking down the non-specific industries category is essential for identifying the exact sub-sectors responsible for emissions, understanding their energy consumption patterns, and locating emission-intensive stages within production chains.
  • Such information would enable policymakers to design targeted interventions, strengthen regulatory mechanisms, and expand mitigation measures to currently overlooked industries.
  • Accurate classification would also improve monitoring and facilitate more effective implementation of climate policies.
• Transparency as a Policy Tool
  • Transparency is not merely an international reporting requirement. It is a vital instrument for effective domestic policymaking.
  • Detailed and reliable data help governments evaluate policy outcomes, identify shortcomings, and make necessary corrections.
  • Without clear knowledge of emission sources, efforts to reduce industrial emissions remain incomplete.
  • Effective climate reporting provides the foundation for evidence-based decisions and long-term planning.

Conclusion

• While initiatives such as PAT and CCTS have strengthened emission management in major industries, a large share of emissions continues to originate from poorly defined non-specific industries.
• Bringing these sectors within the scope of mitigation policies through better data, transparency, and classification is essential for achieving net-zero, supporting sustainable development, and building a resilient low-carbon economy.
• A comprehensive and inclusive approach will ensure that industrial expansion and environmental responsibility progress together.