Green Technology Adoption by MSMEs in India: Barriers, Drivers, and the Role of Entrepreneurship and Skill Development

The Micro, Small and Medium Enterprises (MSMEs) are one of the key pillars in Indian economy contributing 30% to GDP, 36% to manufacturing output and nearly 46% to total exports employing over 250 million people. However, 2022 statistics show that the sector is still largely reliant on fossil fuels — with a total emissions output of around 135 MtCO₂e/year. Green technologies — ranging from energy-efficient equipment and rooftop solar, to waste recycling systems and cleaner alternative fuels — not only save substantial costs (up to 30% in electricity bills) but also help meet India's national climate pledges of reaching net-zero by 2070 as well as a 45% reduction in carbon intensity over the decade (by 2030). However, even with federal stimulus schemes like the MSE-GIFT scheme, ZED certification, MSE-SPICE and the RAMP programme, uptake has remained dismally low across MSME. Major barriers include the high upfront capital cost, limited access to institutional finance, low levels of technical know-how among owner-managers, resistance to change within organisations and weak enforcement of regulations. The current paper performs an exploratory conceptual and thematic review of academic studies, which includes government reports and policy documents mapping the existing situation of green technology adoption among Indian MSMEs. Using the Technology Organisation Environment (TOE) framework and entrepreneurship skill development theory, it explores the main barriers and enablers of adoption alongside assessing their potential for scaling green transitions. The paper suggests that green entrepreneurship Modules should be incorporated into existing MSME Skill development programmes (through cluster-based ESCO models, awareness campaigns and enhanced concessional finance) to accelerate adoption. Findings that are of interest to policy makers, educators, financial institutions and to MSME owner–managers working to realise sustainable industrial transformation.