Though port decarbonisation is a move in the right direction, there is ambiguity as to who will bear the cost of compliance and operational challenges during this transition, particularly since Micro, Small, and Medium Enterprises (MSMEs) do the heavy lifting in terms of port logistics. Though India has a growing green-finance architecture for MSMEs, the green bonds launched by banks remain largely out of reach for them.

This has aggravated problems for the country’s MSMEs, which have been struggling with various other regulatory issues affecting their operations. The port decarbonisation exercise could push up costs by 15-20% for the MSMEs.

MSME-Inclusive Ecosystem

Afaq Hussain, Co-Founder and Director, Bureau of Research on Industry and Economic Fundamentals (BRIEF), said that any framework or roadmap for green transition must be “MSME-inclusive”. “Green transition, particularly in the context of port decarbonisation, opens both opportunities and challenges for MSMEs,” he said.

The impact on certain clusters, particularly those involved in transportation, will be greater during the green transition phase. “MSMEs now require handholding and capacity-building — basically, technical assistance. The government must make guidelines or roadmaps that are MSME-inclusive,” Hussain told The Secretariat.

MSMEs have been striving to keep pace with this decarbonisation pursuit.

MSMEs now require handholding and capacity-building — basically, technical assistance. The government must make guidelines or roadmaps that are MSME-inclusive

– Afaq Hussain, Co-Founder and Director, BRIEF

“A large share of port-related services, including cargo handling, trucking, warehousing, maintenance, fabrication, dredging support, and logistics operations, is delivered by MSMEs that typically operate on thin margins and with limited access to low-cost capital. For these enterprises, replacing diesel-powered equipment, electrifying fleets, adopting digital monitoring systems, or meeting new emissions reporting requirements involves substantial upfront investments,” said Amit Singh, Director, EY, and specialist in port decarbonisation and Net Zero policy.

“The policy challenge is not whether MSMEs should decarbonise, but how they can do so without compromising business viability,” Singh told The Secretariat.

Port Decarbonisation

Under the Maritime India Vision 2030 and the Harit Sagar Green Port Guidelines, the port decarbonisation drive is aligned with national climate targets — cutting carbon emissions per ton of cargo by 30% by 2030 and 70% by 2047.

Ports in India are caught in the midst of this transition. Under the Harit Sagar framework, more than 50% of port equipment and vehicles must be electrified by 2030. The draft National Maritime Decarbonisation Policy Framework (NMDP) outlines a comprehensive roadmap to guide the shipping and port sectors toward a low-carbon, sustainable future.

The policy challenge is not whether MSMEs should decarbonise, but how they can do so without compromising business viability

– Amit Singh, Director, EY

Since the ports are transitioning to global standards, this will give MSMEs more exposure to international markets. However, fossil-fuel-intensive operations have to undergo a structural shift: they are now being electrified. The transition is already visible, as seen in Odisha, Gujarat, and Tamil Nadu.

But it is not just ports that are caught in this transition phase.

MSMEs’ Contribution To GDP, Exports

According to the NITI Aayog report, Roadmap for Green Transition of MSMEs (2026), MSMEs are the “backbone of India’s industrial landscape”, “contributing nearly 30% to the national GDP, 46% to exports, and providing jobs to over 250 million people”.

Further, MSMEs account for 45.7% of India’s exports and 30% of Gross Value Added (GVA) to the GDP.

MSMEs have traditionally relied heavily on fossil fuels to meet their energy and process needs, resulting in approximately 135 million tonnes of carbon emissions (MtCO2e) in 2022 alone, per the NITI Aayog report.

Since ports themselves have conventionally been fossil-fuel-intensive in operations, the transition to cleaner alternatives would require the MSMEs linked to the port ecosystem to recalibrate to cleaner technologies, processes, and energy use.

Be it truck drivers, cargo handlers, equipment suppliers, or even logistics operators —  the small units would now navigate a complex compliance mandate.

This warrants handholding and, most of all, an inclusive ecosystem.

The Price That MSMEs Pay

It is not the mandate, but the price, that may leave them in the lurch.

“The draft National Maritime Decarbonisation Policy Framework is a step in the right direction. India’s ports and shipping sector cannot achieve net-zero without a clear national roadmap. However, a green procurement mandate on its own could become a compliance burden for MSMEs rather than an opportunity,” Vikash Kumar Sinha, Associate Partner at MicroSave Consulting (MSC), told The Secretariat.

Who Bears The Transition Cost?

On July 15, 2025, the Central government launched the ₹1,000 crore ADEETIE programme (Assistance in Deploying Energy Efficient Technologies in Industries & Establishments) to support MSMEs in adopting energy-saving equipment and cutting carbon emissions. The support is available for loans taken to adopt energy-efficient technologies/measures. The officially recognised list covers 14 sectors across 60 identified clusters, including fisheries, pharma, and textiles.

A green procurement mandate on its own could become a compliance burden for MSMEs rather than an opportunity

– Vikash Kumar Sinha, Associate Partner at MicroSave Consulting

However, there is no specific clause that explicitly mentions support to ports-linked MSMEs.

“The success of the [draft policy] framework will depend on whether MSMEs have access to the finance and technical support needed to make the transition. Blended finance, credit guarantees through banks and NBFCs [Non-Banking Financial Companies] that already serve these MSMEs, and phased compliance timelines can help bring private investment into the MSME segment, instead of simply shifting the cost of the transition onto them,” Sinha further said.

Lessons From The Port Of Long Beach

Across the globe, governments and the establishment concerned have taken concerted measures to ensure a smooth and seamless transition to green and sustainable practices. For instance, the Port of Long Beach, a premier US seaport in California that handles over $200–$300 billion in trade annually, implemented a strategy under its Clean Truck Fund (CTF) programme, wherein all existing diesel trucks were levied additional charges to enter the port. “This additional charge was given as a subsidy to fleet operators who were transitioning to zero-emission vehicles, such as battery-electric or hydrogen fuel-cell heavy-duty trucks,” Hussain said.

Although MSMEs are not directly involved in the core technical operations at designated ports, they are closely linked to logistics, transportation, and maritime trade. According to expert estimates, export and import costs will increase by 15-20% once the green transition framework comes into effect.

“MSMEs will need access to concessional finance, viability gap support, accelerated depreciation benefits, green technology leasing models, and targeted credit guarantees to undertake the transition. Equally important will be the creation of shared green infrastructure at ports, such as shore power, charging stations, common hydrogen or alternative fuel facilities, and digital platforms that reduce compliance costs for smaller operators,” Singh further pointed out.

Need For Incentives

Procurement preferences or sustainability-linked incentives become crucial here. Without them, MSMEs may find it difficult to recover their green investments. “The transition must therefore be viewed as a partnership between government, ports, large logistics players, financiers, and MSMEs,” Singh highlighted.

Mere compliance without active participation would make the decarbonisation framework a burden instead of an opportunity for MSMEs to tap into new markets and cleaner technologies.