The spices that line your kitchen shelf or your go-to Kolhapuri Chappal may not be the first thing that comes to mind when you hear the words “green transition”. Typically, the term invokes images of solar panels, electric vehicles and recycling bins. But every industry is going green, even traditional industries like food processing and leather.

These traditional industries are crucial to Tamil Nadu’s trillion-dollar GDP vision. As per the Udyam Portal, key segments within Tamil Nadu’s food processing sector and leather sector account for about 1.45 lakh and 12,000 micro, small and medium enterprises (MSMEs) respectively. While modest in size, these units are essential to India’s domestic and export aspirations. Collectively, they employ large numbers and anchor women’s workforce participation. 

As India advances toward its 2070 net-zero goal, international buyers — especially in Europe and markets such as America and Southeast Asia — are demanding low-carbon products with traceable social and environmental footprints across the supply chain. In this rapidly changing climate and market landscape, how can MSMEs grow sustainably?

Green Growth is the Way Forward

MSMEs are particularly vulnerable to economic shocks and often struggle to access finance and technologies. Many are also apprehensive about meeting the costs associated with a green transition. But carbon-intensive operations are not just a detriment to meeting regulatory requirements; they can also be expensive and inefficient.

Leather enterprises often use Zero Liquid Discharge (ZLD) systems to meet pollution norms. But these systems have high thermal and electrical energy requirements, making them costly for small tanneries. Employing energy-efficient equipment and solar power can cut operational costs by up to 30%. 

Among food clusters, processing of sago and spices are energy-intensive, contributing to both air pollution and greenhouse gas emissions. Traditional turmeric dryers — used in post-harvest processing to increase shelf life — are not as efficient as hybrid solar-biomass dryers and consume more fuel.

In seafood hubs, cold storage is among the most energy-intensive operations. Refrigeration accounts for 60–70% of the total electricity consumed by cold storage. Upgrading to efficient chillers and natural refrigerants can reduce energy bills, lower climate impact and ensure compliance with India’s Hydrochlorofluorocarbons (HCFCs) Phase-Out Management Plan. 

Transitioning towards clean energy and low-carbon operations can help enterprises reduce costs and emissions, ensuring that they remain competitive and resilient through shifting global norms and disruptions.

Tamil Nadu’s Four Clusters of Change

Four industrial hubs in Tamil Nadu — Vellore, Pallavaram, Salem-Erode and Thoothukudi-Ramanathapuram — are already emerging as high-potential clusters for low-carbon growth.

With over 60% women in our workforce, and every tannery supporting families, our shift to cleaner technologies and collective energy solutions is about building a thriving, low-carbon future for our industry and community alike.”

- Md Nazeeb, MD, Pallavaram Tanners and Industrial Effluent Treatment

In Vellore and Pallavaram, tanneries are piloting biogas from sludge, switching to solar thermal systems, and upskilling workers in circular practices. “At Pallavaram, we believe sustainable growth means investing in both people and processes,” says Md Nazeeb, Managing Director, Pallavaram Tanners and Industrial Effluent Treatment.

In the Salem cluster, spice processors are adopting solar drying to enhance product quality and sustainability. The Council of Scientific and Industrial Research (CSIR) also recommends practices such as single-step grinding to convert turmeric and agri-waste into bioenergy across India’s turmeric clusters to support resource efficiency.

In the southern-coast belt of Tamil Nadu, seafood processors, once reliant on diesel-based cold chains, can now leverage emerging liquefied natural gas (LNG) powered systems that emit significantly less particulate matter and carbon dioxide. These technologies can be complemented by emerging interest in solar ice-making plants and biogas generation from fish waste, signaling a broader shift toward more sustainable value chains.

While there is no single national-level study, pilot projects across India and the world offer valuable insights. Scaling such initiatives could reduce emissions by 35–50% by 2030 while also generating low-carbon, market-ready products.

What Needs to Happen

Despite the success of these pilots, challenges around awareness and access limit wide-spread uptake of these models. To stay competitive in an evolving global environment, MSMEs will need focused action on three fronts:

1. Scale cluster-based clean energy pilots: Affordable financing is key to expanding promising projects such as advanced biomass feeding systems and torrefaction plants in Vellore, sludge-to-paver block solutions in Pallavaram’s leather clusters and solar-powered cold chains in food processing units. Adoption of Resource Efficient and Cleaner Production (RECP) practices — like low-heat drying and efficient refrigeration — must be mainstreamed to enhance productivity and reduce emissions in the food processing sector.

2. Streamline policy delivery: Tamil Nadu is already implementing programs to support MSMEs, such as the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME), as well as the state’s solar roadmap, which is guided by the Tamil Nadu Solar Energy Policy 2019. Better coordination at the ground level, increased awareness among enterprises and stronger facilitation within industrial clusters can strengthen the reach of these policies.

3. Foster peer learning and entrepreneurial networks: Many small firms learn best from neighbors who pioneer new practices. Industry associations can drive this by organizing demonstration days, collaborative design studios and working groups. These locally rooted, peer-led platforms build trust and accelerate sustainable adoption, outperforming traditional top-down approaches.

The future of India’s green transition will, in many ways, be written by its 73.4 million MSMEs. Whether they lead or lag in this journey will define the country’s ability to align economic growth with climate ambition. Tamil Nadu’s food and leather clusters prove that connecting enterprises — not just to electricity grids, but to ecosystems of support —can pave the way for a low-emission industrial transition.


Ajit Gerald is Former Program Associate, Climate, Economics and Finance Program, WRI India.