MSMEs are the backbone of Indian economy and employ more than 110 million people in India. Yet they are highly informal, have access to inadequate institutional support and finance and are vulnerable to economic shocks. Increasingly, MSMEs are also exposed to impacts of climate change, such as heat waves, water stress, flooding, which affect the productivity and the well-being of those employed in the sector. As India undergoes a low carbon transition, and MSMEs face the imperative to decarbonize, MSMEs may be further vulnerable to loss of revenue and loss of jobs, as certain fossil-based sectors (Ex. automotive) shrink. On the other hand, if necessary support is provided, India’s low carbon transition could also provide an opportunity to MSMEs to move to cleaner production and cleaner products while creating better, inclusive and additional jobs.

This session explores the facets of the undergoing shifts both induced by climate change as well as those that result from climate policies and decarbonization imperatives that may impact MSMEs and the measures that are needed to ensure a just, equitable and inclusive low carbon transition and ensuring a thriving MSME sector.