Prioritizing Green Finance for Emission Reduction in Indian MSME Subsectors : An Exploration
Authors
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Anuj Kumar
Post-Doctoral Fellow (Corresponding Author), Faculty of Business, Economics and Finance, Perdana University, Suite 5.3, Wisma Chase Perdana Changkat Semantan, Damansara Heights, 50490 Kuala Lumpur, Malaysia. & Faculty of Business and Economics, Al-Quds University, Jerusalem, Palestine (P.O. Box 19356)
https://orcid.org/0000-0002-1205-2794
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Syriac Nellikunnel Devasia
Associate Professor and Dean, Faculty of Business, Economics and Finance, Perdana University, Suite 5.3, Wisma Chase Perdana Changkat Semantan, Damansara Heights, 50490 Kuala Lumpur, Malaysia
https://orcid.org/0000-0001-5646-6342
DOI:
https://doi.org/10.17010/ijf/2026/v20i8/176086Keywords:
green finance, estimated green-investment requirements, projected carbon-emission reductions, energy efficiency potential, micro, small, and medium enterprises, sectoral analysis, India.JEL Classification Codes : G31, O13, Q52
Publishing Chronology: Paper Submission Date : October 25, 2025 ; Paper sent back for Revision : May 25, 2026 ; Paper Acceptance Date : July 5, 2026 ; Paper Published Online : August 17, 2026.
Abstract
Purpose : The current research aimed to investigate the relationship between estimated green-investment requirements and projected carbon-emission reductions across five micro, small, and medium enterprise subsectors in India.
Design/Methodology/Approach : This research employed secondary data analysis to investigate estimated green-investment requirements and projected carbon-emission reductions in five micro, small, and medium enterprise subsectors: textile, paper and pulp, foundry, forging, and steel rerolling. Microsoft Excel was used to perform Pearson correlation and significance testing. Sectoral comparison was carried out based on three key variables: estimated green-investment requirements, projected carbon-emission reductions, and energy efficiency potential.
Findings : The study found a strong positive association between estimated green-investment requirements and projected carbon-emission reductions (r = 0.864). However, the relationship was not statistically significant at the 5% level (p = 0.059). Sectoral comparison also showed differences among the subsectors in projected carbon-emission reductions, estimated green-investment requirements, and energy-efficiency potential. Given the limited five-subsector dataset, the findings were interpreted as exploratory. Further longitudinal and empirical research was considered necessary to determine whether sectors with higher investment requirements also exhibited greater projected emission-reduction potential.
Practical Implications : The results indicated that green-transition planning needed to consider the differences in sectoral investment requirements, emission-reduction potential, and energy-efficiency opportunities rather than relying solely upon the level of investment.
Originality/Value : The study provided an exploratory sector-level comparison of estimated green-investment requirements, projected carbon-emission reductions, and energy-efficiency potential and offered a differentiated basis for green-finance prioritization across energy-intensive micro, small, and medium enterprise subsectors.
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