Structural Transformation of Indian Industry: An analysis of its Environmental impact and Sustainability challenges

Abstract

The Indian economy has undergone a major structural change in the past three decades with falling importance of agriculture, moderately growing share of industry and rapid growth of services sector. It has stimulated GDP growth and employment diversification but has also increased energy use and GHG emissions, including from energy intensive sectors like iron and steel, cement and chemicals. This paper examines India's industrial structural change, quantifies its environmental footprint, and identifies key sustainability challenges, reviewing policy instruments such as PAT, the Green Hydrogen Mission, and the Carbon Credit Trading Scheme that aim to reconcile growth with India's net-zero-by-2070 commitment. While relative decoupling of emissions from output has begun, absolute emissions continue to rise, underscoring the need for accelerated technological upgrading and cleaner energy access.