When a Japanese multinational technology company announces that its factory in Osaka runs on floating solar panels on an adjacent reservoir, global sustainability indices take note. But when a California-based EV battery manufacturer’s auto component plant in Pune converts entirely to rooftop solar system (RTS), generating 545 MWh annually and meeting 100% of its energy needs, or the Panipat textile cluster in Haryana, India’s recycling capital, begins its nascent adoption of renewables amid its push towards a low-carbon circular economy, it is often viewed simply as operational efficiency.

The difference does not lie in its intent or performance, but in the architecture of recognition. In a world where supply chains are increasingly carbon-accounted, capital flows are ESG-sensitive and disclosures influence valuation, the ability to certify, standardise and credibly communicate green-manufacturing capability will determine competitiveness.

For India, aspiring to be a global manufacturing hub, the stakes are even higher. This is no longer just an environmental conversation, it is an economically imperative.

Industry’s climate dilemma

As the world’s third-largest emitter of greenhouse gases, accounting for approximately 7%-8% of global emissions as reported by Climate Change Tracker, India is also one of the fastest-growing manufacturing economies, with an industrial output projected to expand around 8.64% CAGR between 2025 and 2035, according to the Market Research Future report by Spherical Insights & Consulting. This creates a structural dual mandate, which is to industrialise at scale while reducing emissions intensity in a disciplined and structured manner.

Meeting this mandate requires a framework that reflects Indian realities, including energy tariffs that vary significantly across states. It also considers that more than half of India’s land area faces high to extremely high water stress, according to India Water Tool 2.0. Manufacturing supply chains are also deeply localised and (MSME)-dominated.

A green factory in India, therefore, cannot be a derivative of European design principles. It must be engineered around Indian economic, climatic and demographic conditions.

The country maintains green building and energy-efficiency foundations through certifications such as the Confederation of Indian Industry’s Indian Green Building Council (IGBC), the Ministry of New and Renewable Energy-backed Green Rating for Integrated Habitat Assessment (GRIHA), Leadership in Energy and Environmental Design (LEED), the Bureau of Energy Efficiency’s Star Rating programme, and CII’s GreenCo Rating System.

More significantly, India’s manufacturing sectors are demonstrating measurable commitment. Rooftop solar adoption across manufacturing clusters has grown and circular economy practices, including material recycling and waste heat recovery, are being adopted widely.

Yet, unlike developed markets where a single sustainability benchmark often enjoys global recognition and investor confidence, India’s green factory certification remains distributed across multiple frameworks. They are robust, but they do not yet operate as a unified national signal in global capital markets.

As a result, thousands of manufacturing units, particularly among India’s 6.5 crore registered MSMEs that contribute roughly 31.1% of GDP and employ millions as reported by IBEF, undertake, or are keen on, meaningful decarbonisation and water stewardship initiatives without fully capturing their economic value.

Certification paradox

The consequence is a paradox, where operational sustainability advances faster than institutional recognition. India’s domestically developed frameworks such as GRIHA and IGBC, while rigorous and contextually appropriate, carry limited legibility with global sustainability indices and international investors, who largely default to LEED as the only internationally recognised benchmark among India’s suite of certifications.

So, what must an Indian ‘green factory’ framework address?

Globally, green factories are perceived as facilities designed to minimise environmental impact through renewable energy use, efficient resource management, and reduced emissions. In India, however, the definition must extend further to include capital accessibility, resilience to water stress and scalability for MSMEs. Simultaneously, with India’s manufacturing ambition, under initiatives such as Make in India and production-linked incentive (PLI) schemes, coinciding with global supply chains actively seeking low-carbon production hubs, a clearly defined Indian ‘green factory’ framework should reflect these realities.

Apart from being measured on parameters such as energy efficiency, water stewardship, waste management and carbon reduction, sustainability is, increasingly, also tied to disclosure requirements such as the Business Responsibility and Sustainability Reporting (BRSR), which mandates ESG reporting for top listed entities in India.

A redefined Indian green factory framework must be assessed not only by environmental metrics, but also by its capacity to attract sustainable capital, enhance export competitiveness, mitigate long-term energy risk, and strengthen climate resilience. In today’s context, sustainability is inseparable from strategic positioning.

To build globally competitive green manufacturing, India needs a multi-layered approach in which the evolution of a factory into a green factory becomes part of a larger national blueprint. The kind that integrates renewable energy, digital intelligence, credible certifications, and MSME inclusion into a cohesive industrial identity.

The country’s industrial policymakers must come together to establish a unified, India-specific green factory rating system. A framework that reflects its unique landscape and demands in terms of scale, its diversity and its ambition. Because an Indian green factory does not have to look like the one in Denmark to be called ‘green’ to earn global respect. This nation must define green manufacturing on its own terms.

That, ultimately, is the foundation of an enduring industrial leadership.

The writer is Chief Executive Officer, Jupiter International Limited