Navigating the Green Energy Framework: Akshat Khetan's Proposition Towards Unlocking Real Advantage for MSME's in India’s Sustainability Revolution

India is really making some bold moves from climate ambition to green reality, but it is necessary to re-hyphenate the current legal and financial systems. This demand is most evident nowhere more than in the case of India's 60+ million micro, small, and medium-sized businesses (MSMEs), a sector that accounts for almost 30% of our GDP and employs over 110 million people. Nevertheless, despite their important contribution to the economy, MSMEs are structurally under-represented in the current surge of green development. Our founder, Akshat Khetan, at AUCL thinks that to address this, more thought is required on how well our present clean energy frameworks fit the current reality of MSMEs. 

 The Need to Rehash the Rulebook

Codes like the Energy Conservation (Amendment) Act, 2022, and Renewable Purchase Obligation (RPO) rules define India's present regulatory architecture, demonstrating a clear intent to decarbonise. As Akshat Khetan points out, though, these policy actions seem to MSMEs more as burdens than as means of enhancing long-term value. Framing it right also absolutely counts since, as is the case with most rules, intent may be right, but how one words it also matters. 

Embracing green and helping to create clean narratives remains quite challenging for many smaller businesses due to limited awareness, lack of advisory support and a clear mismatch between productivity goals and environmental impact, which results in lack of activity and general stagnation.

 The Paradox of Sustainability Finances:

For many startups and small companies, accessibility to finance often proves to be rather elusive. Although global ESG investing did reach $41 trillion in 2022, Indian MSMEs, despite their economic importance, continue to face a credit gap of more than $530 billion (IFC data). For MSMEs, green financial instruments, including bonds, guarantees, or ESG-linked working capital, are mostly out of reach since their size does not match with what investors want, leading to a clear disconnect. As Akshat Khetan clearly points out, "There is a structural intermediary gap." Legal and financial ecosystems that support easy credit access for MSMEs are therefore definitely much needed. 

Our work with mid-market and startup businesses at AUCL is centred on closing this gap, from a knowledge POV, providing advice on legal models, tools, and frameworks that are both climate-smart and business-relevant. 

MSMEs as the new supply chain pivots: 

Global and local value chains must incorporate MSMEs as key actors as bigger companies speed up their decarbonisation initiatives. Depending on their capacity to satisfy new environmental expectations, this evolution would give MSMEs an opportunity to integrate while clearly sorting out those who can't.

Akshat Khetan contends that in greener supply networks, MSMEs who actively invest in energy efficiency, materials circularity, or EPR compliance will find themselves more in demand. But such an approach can only be facilitated through support rather than mere policy recommendations. 

In line with a more capable framework, Akshat Khetan presents a call to rethink the architecture of transition itself, not a solution manual. The current green energy structure has to change from a compliance-centric model to one that is capability-driven, decentralised, and inclusive if MSMEs are to actively help India achieve its net-zero targets.

 At AUCL, we keep interacting with institutional investors, legislators, and business leaders to investigate how legal structure, financial innovation, and regulatory design might be harmonised to meet this moment. India's green story cannot and should not be written without its small and medium businesses.