India’s commitment to achieve net-zero emissions by 2070 has brought focus to renewable energy and industrial decarbonisation. However, public procurement, accounting for nearly 22 per cent of the country’s GDP, remains an underutilised climate tool. Government purchasing in India could be responsible for emissions exceeding 590 million tonnes of CO2-equivalent annually. Integrating sustainability in procurement can transform this vast economic activity into a powerful lever for climate action.
Significance of Public Procurement in India
Public procurement drives about ₹72 lakh crore of economic activity yearly. It influences markets and industrial standards through large-scale purchases in sectors like transport, construction, and manufacturing. Decisions made lock in environmental impacts for decades. Ignoring green factors risks high-carbon infrastructure and costly future transitions. Green procurement turns public spending into long-term climate investments.
Current Policy Landscape and Challenges
India’s procurement framework is fragmented without a unified national law or WTO Agreement membership. Rules exist across various departments and guidelines. The General Financial Rules (2017) introduced environmental provisions, and the Manual on Procurement of Goods and Services (2024) recognised sustainability as part of value assessment. However, implementation varies widely. Many departments lack capacity and training. Suppliers, especially small businesses, often have limited awareness of green compliance.
Global Best Practices
The European Union mandates environmental standards in procurement with legal backing. South Korea uses legislation combined with fiscal incentives to encourage green purchases. These models show measurable emission reductions and cost savings. India can blend binding standards like the EU’s with South Korea’s incentive-driven approach. This hybrid model can be adapted to India’s market and institutional realities.
Steps to Institutionalise Green Procurement
Capacity building for procurement officials is vital. Platforms like Mission Karmayogi can provide sector-specific training and tools. Clear, standardised definitions of green products and services are needed. A national taxonomy aligned with EcoMark and sectoral taxonomies like the Ministry of Steel’s Green Steel Taxonomy will aid clarity. Market readiness must improve by extending preferential procurement benefits and including green sectors in incentive schemes like Production Linked Incentive (PLI). Lastly, procurement must shift from a back-office task to a strategic policy instrument with embedded sustainability criteria, monitored compliance, and transparent reporting.
Potential Impact and Economic Benefits
Adopting green procurement standards could reduce procurement-linked emissions by 15-20 per cent, saving 88-117 million tonnes of CO2-equivalent annually. Even a 1 per cent improvement in procurement efficiency could save ₹72,000 crore. Green procurement drives innovation, supports domestic industries, and aligns public spending with India’s climate ambitions.
Questions for UPSC:
- Point out the role of public procurement in achieving sustainable development goals and how it can influence industrial growth in India.
- Critically analyse the challenges faced by India in implementing green procurement policies and suggest measures to overcome them.
- With suitable examples, estimate the impact of government policies on promoting renewable energy adoption and reducing carbon emissions in developing countries.
- Underline the significance of international agreements like the WTO’s Agreement on Government Procurement in harmonising global trade and environmental standards; how can India benefit from joining such frameworks?
