A decarbonisation initiative led by the Foundation for MSME Clusters (FMC), supported by HSBC and implemented in collaboration with the Centre for Responsible Business (CRB), has concluded with a strong, measurable impact in the Panipat textile cluster, demonstrating that sustainability can be both practical and profitable for MSMEs.
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Business Development Service Provider Interactive session on ERP software for efficient planning and resource management leading to decarbonization
The project, “Demonstrating Decarbonisation Pathways through Pilots in Textile SMEs,” set out to enable MSMEs to transition towards low-carbon operations and in doing so, with the recommendations, has projected reduction in annual emissions up to 5655.60 tonnes of CO2, developed bankable proposals of INR 39.94 crore for green financing for MSMEs and unlocked annual cost savings of 6.47 crore across participating enterprises.
Conceived at a time when textile MSMEs face increasing pressure from global sustainability standards but limited access to finance, technology and technical know-how, the initiative aimed to bridge this gap by demonstrating scalable, business-friendly decarbonisation pathways.
Anchored in Panipat, India’s leading recycled textile hub, the project focused on strengthening both environmental performance and global competitiveness of MSMEs, proving that climate action need not come at the cost of growth.
What distinguishes the initiative is FMC’s ecosystem-driven, implementation-first approach. Moving beyond awareness, the project engaged 40 MSMEs, including 16 pioneering enterprises that received intensive support through diagnostic assessments, customised decarbonisation plans, technology linkages, and facilitation of green finance.
A series of targeted BDSP promotion events further strengthened the ecosystem by bringing together MSMEs, financial institutions, and technical experts, resulting in 215 enterprises being sensitised and creating strong linkages with service providers. These interventions translated into real interest and action around energy audits, solar adoption, digitalisation, and cleaner production processes, areas critical for both cost efficiency and compliance with global standards.
For MSMEs on the ground, the shift has been both perceptual and practical. “Earlier, sustainability felt like an added burden. Through this project, we realised it actually improves efficiency and reduces costs. We are already seeing savings and feel more confident in meeting international buyer expectations,” said Mr Ankur, an entrepreneur from Panipat.
Reflecting on the broader significance, Mr Manoj Bhatt, FMC representative, noted, “This initiative shows that decarbonisation for MSMEs is not just about compliance—it is about competitiveness. By combining technical support, financial access, and ecosystem partnerships, we have created a model that can be scaled across India’s industrial clusters.”
As the project concludes, it leaves behind more than just numbers; it offers a clear roadmap for scaling sustainable transformation across MSMEs.
The key learnings are unequivocal: awareness must be backed by continuous handholding, adoption accelerates when the business case is clear, local service providers play a critical bridging role, and ecosystem collaboration is essential for long-term impact. In a global market increasingly defined by sustainability, the Panipat experience stands as a compelling blueprint for how India’s MSMEs can transition towards a low-carbon future while strengthening their economic resilience.
About FMC
Foundation for MSME Clusters (FMC) is a leading non-governmental, not-for-profit public charitable trust, established in India in 2005. FMC has made remarkable strides in fostering sustainable livelihoods and environmental progress through our innovative cluster development approach. Our work spans more than 300 MSME clusters, supporting over 100,000 artisanal and industrial units, ranging from household operations to medium-sized production entities. As an empanelled Nodal Agency with the Ministries of MSME and Rural Development, FMC extends support to prominent schemes like SFURTI, and is also providing technical, research and evaluation support to various organisations, including SIDBI & KVIC. FMC has implemented multiple projects on environment and livelihoods with support of agencies like NABARD, UNIDO, UNDP, EU, ADB, and major corporates such as CISCO, Mahindra Finance, HCL, Yes Bank and Hindalco. Since its inception, FMC has enhanced more than 275,000 livelihoods, impacted more than 100,000 women by generating income of more than 75 Crore INR and facilitated the reduction of 60,000 tons of carbon.
For more details,
Please Contact: Mr Manoj Bhatt
Mobile no: +91 7742907423
Email: manoj@msmefoundation.org
Website: www.fmc.org.in
