Industrial Policy in India: Innovations in Sustainable Practices

By Shipra Jha

After the age of industrialisation, industrial policy in India has now embraced the age of sustainable industrial practices.

Globally, sustainability became a mainstream conversation topic in the 1960s with Rachel Carson’s book The Silent Spring, where she demonstrated the degradation of wildlife due to DDT (DDichloro Diphenyl Trichloroethane). It has amped up to reach 17 sustainable development goals with the aim of achieving them in the given target time frame.

Since then, the global industrial sector has seen a gradual transition, owing to the pressing need to address environmental issues and assure long-term sustainability.

What are the sustainable industrial policies and practices of New India?

Over the last two years, the discourse around a USD 5 trillion economy and the targets to achieve by 2030 have compelled Indian industries, and by extension, the industrial policy in India, to take the idea of climate change and environmentally friendly solutions seriously.

India’s initial Nationally Determined Contribution (NDC) under the Paris Agreement in 2015, in a national declaration at the 26th Conference of the Parties (COP 26) in Glasgow in November 2021, India’s Prime Minister Narendra Modi set ambitious targets for 2030 to reduce emissions. The movement taken in the conference was ‘LIFE’, which stands for ‘Lifestyle for Environment,’ which aims to promote awareness and purposeful consumerism over destructive ones.

Here are the following innovative industry sustainable trends for 2024 that you must know about:

Circular Economy

This concept has been taken as a new approach to the path of sustainability. We are moving towards a model that is a closed-loop system with minimal waste and minimal use of plastic. In August 2021, the Plastic Waste Management Amendment Rules, 2021, were sent out with the goal of eliminating single-use plastic by 2022.

The aim of the regulation was to improve the circular economy of plastic packaging waste, encourage the development of alternative materials, and promote sustainable plastic packaging. The priority is to reduce waste through product design, maximise resource utilisation, and ensure that materials are reused, mended, or recycled at the end of their life cycle.

Carbon Footprint Reduction

China and the US are the world’s leading carbon polluters, emitting 11.4 and 5.1 billion metric tons of carbon dioxide (GtCO2) in 2022, respectively. India’s per capita carbon dioxide (CO2) emissions increased from 0.39 metric tons in 1970 to 1.91 metric tons in 2022. Carbon dioxide emissions from fossil fuel consumption and industrial activities in India climbed by 6.5 percent in 2022, hitting a new record high of 2.7 billion metric tons (GtCO2).

India’s dependability on coal is one of the primary reasons for the most polluting fossil fuel. In 2021, India’s CO2 emissions from coal reached around 1.8 billion metric tons. This accounted for more than 70% of India’s overall emissions that year.

Clearly, being a big economy means having a big carbon footprint.

But the pressure to change course is rising, from governments and citizens across the world. Businesses are working aggressively to cut greenhouse gas (GHG) emissions from their operations, goods, and vendor networks. The companies that are involved in carbon reduction initiatives are being pushed or inspired to start reforestation and clean energy projects to make sure the world is a better place.

Industries have been switching to renewable sources of energy, together with energy efficiency measures, which can help cut emissions and costs. For instance, agribusinesses are replacing fossil fuel use with agri-residue biomass to cover their total energy needs.

Marketplaces may demonstrate their dedication to long-term viability, conform to laws and regulations, and even enhance their ESG score.

As of fiscal year 2021, the environmental, social, and governance (ESG) composite score for India’s industrial sector was the highest among the NIFTY 50 businesses, at 74. The improvements are happening with rising awareness about the environment.

Energy Conservation

One of the key goals of green manufacturing is to increase energy efficiency. This entails utilising innovative technology and techniques to lower the energy used in manufacturing processes, even across heavy industries like mining and steel manufacturing.

With 1.4 billion people and one of the world’s fastest-expanding economies, India has lately established itself as a renewable energy pioneer. India has tremendous renewable energy potential due to its vast geography of around 3.3 million square kilometres.

As of 2022, India had 163 GW of installed renewable energy capacity, ranking fourth in the world. Between 2012 and 2022, the Asian country’s renewable power generation more than quadrupled. Despite these advancements, thermal energy derived from coal and oil continued to dominate India’s entire energy mix. However, the energy sector will increasingly rely on renewables.

Waste-Free Programs and Management

India has a waste management challenge. India has surpassed China as the world’s biggest population, with 1.43 billion people as of mid-2023, and its daily municipal trash output has steadily increased, exceeding 160 thousand metric tons in fiscal year 2021. The Ministry of Environment, Forests, and Climate Change (MoEFCC) regulates and manages garbage across the country.

Businesses are employing techniques such as trash segregation at the source, recycling garbage into usable goods, and collaborating with waste management providers to ensure effective disposal.

For example, many textile firms recycle fabric waste into new clothing, whereas food and beverage companies transform organic waste into compost. Governments and corporations are starting to embrace zero waste targets, which seek to reduce waste output and redirect materials away from incinerators and waste dumps by stressing resource recovery, recycling, and reuse.

Recycling to Energy Techniques

With advancements in waste-to-energy technologies ranging from aerobic breakdown to gasification, converting garbage into useful energy sources is simpler than ever before. Businesses may access green alternatives to conventional energy sources by turning recyclables into usable forms of energy such as heat, power, and fuel.

The new technology offers a consistent supply of energy, allowing businesses to minimise their dependency on fossil fuels and cut energy expenditures.

What can be inferred from sustainable innovation?

Sustainable innovation is the creation and execution of new goods, services, technologies, and business models that bring economic and social benefits while protecting our planet and biodiversity. Also, it seeks to fulfil current demands while preserving future generations’ ability to meet their own.

It covers renewable energy, transportation, green building, agriculture, and eco-friendly products. It understands systems perspective, which means that it evaluates not just the environmental effect of a product or technology but also its social and economic consequences.

India maintains its 40th position out of 132 economies, confirming the country’s continuous rise in various innovation metrics and indicating a tremendous journey from 81st place in 2015 to this significant achievement, according to a report by the Innovation Index 2023, showcasing the success of industry policy in India.

Advanced Technologies in Sustainable Industrial Innovations

Smart Grids and IoT

The use of smart grids and the Internet of Things (IoT) in production procedures enables real-time monitoring and optimisation of energy use. This results in considerable savings in energy use and prices.

Advanced Robotics

The use of robots and automation in production enhances efficiency while also reducing waste. Robots can do jobs precisely, reducing material waste and energy use. Service robots are the main category in this market, with an estimated market volume of USD 295.60 million in 2024. Looking ahead, revenue is predicted to expand at an annual rate of -2.03% (CAGR 2024-2028), resulting in a market volume of USD 639.50 million by 2028.

Green Mining

The Ministry of Coal defines green mining as, “Returning the land disturbed by mining to stable and productive post-mining land uses is fundamental to responsible environmental stewardship.”

Activities like mining are crucial to infrastructure building and development, but also lead to immense environmental damage. Green mining pushes for ecological reclamation of mined out land and overburdened dumps, plantation in and around mines, avenue plantation, and restoration of flora and fauna to go alongside with mining, to leave a lighter mining footprint.

Why is it important for industries to opt for sustainable routes?

Contrary to popular belief, sustainability frequently produces economic rewards. Energy-efficient processes minimise utility expenses, while sustainable materials can lower overhead. Adopting green practices may attract new markets and customers, improve the company’s reputation, and increase loyalty.

Sustainability is also a method of risk management. Industries that rely on limited resources or engage in harmful activities are susceptible to regulatory changes, market instability, and reputation damage. The investment demands long-term viability by mitigating potential dangers.

Way Forward

The seriousness of sustainable innovations has been progressing as we speak. The new industrial policy in India is evidence of the country’s progress.

The following gives you a snapshot of new industrial policy in India geared toward sustainable innovation:

De-reservation of the Public Sector: The preeminent public sector roles were retained in critical fields such as guns and munitions, atomic energy, mineral oils, rail transportation, and mining.
De-licensing: Except for a few sectors, all projects have been repealed, leaving just four industries that require industrial licenses: electronic aerospace, defence equipment, hazardous chemicals, industrial explosives, and tobacco cigarettes.
Disinvestment in the public sector: Government shares in public sector enterprises were lowered to improve efficiency and competitiveness.
Foreign investment liberalisation: Foreign corporations are now permitted to own a controlling interest in 47 high-priority industries, with export trading houses allowing up to 74%.
Foreign Technology Agreement: Automatic approval of technology-related agreements.

Thus, sustainable ideas evolve on a daily basis to make society more efficient and to provide a better present and future.

Data for this article on the industrial policy in India and it’s sustainable innovations came from the following sources:

Industrial Policy in India: Innovations in Sustainable Practices

By Shipra Jha