Exports helping Indian factories become up to 25% greener

By Admin

08 Oct, 2025

India’s Manufacturing Growth Turning Sustainable
Exports are doing more than just boosting India’s manufacturing sector they’re helping factories operate more sustainably. According to a new study by the Indian Institute of Management (IIM) Lucknow, led by Prof. Chandan Sharma from the Economics and Business Environment area, export participation can make Indian factories up to 25% more energy-efficient within just three years.

Groundbreaking Research and Its Approach
Published in the journal Energy Economics (Elsevier), the study provides the first empirical evidence linking export activity to greener manufacturing in India. Using a Propensity Score Matching–Difference-in-Differences (PSM-DID) approach, the researchers analysed two decades of firm-level data to determine how exposure to international markets influences technological adoption and sustainable production practices.

Exports as a Catalyst for Green Transformation
Contrary to the common belief that trade liberalisation harms the environment in developing economies, the study highlights a positive trend integration with global markets is driving green growth. Firms engaged in exporting, and even those located in export-intensive clusters, demonstrate measurable improvements in energy efficiency and reduced energy intensity.

Technology Diffusion: The Key Driver
The researchers attribute much of this progress to technology diffusion, where exporting firms gain access to advanced and cleaner foreign technologies through trade relationships. This exposure encourages companies to upgrade their machinery, adopt innovative processes, and implement energy-saving practices, making them more sustainable in the long run.

Policy Implications for a Greener Future
The study recommends that policymakers align trade and sustainability strategies to maximize these benefits. Suggested measures include:

• Facilitating access to cleaner foreign technologies
  
  

• Offering incentives for firms to upgrade to energy-efficient systems
  
  

• Strengthening environmental standards in export-oriented sectors
  
  

Conclusion: Exports Powering India’s Green Leap
India’s growing integration with global markets is not just strengthening its economic foundation but also nurturing a more sustainable industrial future. By combining trade growth with eco-conscious policies, the nation can ensure that its factories continue to thrive efficiently, competitively, and responsibly.