The ADEETIE Scheme: Transforming India’s MSMEs through Energy Efficiency

By Eram Shaikh --
Wednesday, 16 Jul, 2025

India’s Micro, Small, and Medium Enterprises (MSMEs) form the backbone of the national economy, contributing significantly to employment and industrial output. Yet, energy costs and outdated technologies have often impeded MSMEs’ growth and competitiveness. The Ministry of Power, in collaboration with the Bureau of Energy Efficiency (BEE), has launched the Assistance for Deployment of Energy Efficient Technologies in Industries and Establishments (ADEETIE) scheme. This transformative initiative aims to equip MSMEs with the tools, support, and financial access needed to adopt energy-efficient technologies and thrive in the competitive industrial landscape.

Overview of the ADEETIE Scheme

The ADEETIE scheme is a central sector program with a budget outlay of ₹1,000 crore, focusing on guiding MSMEs towards energy-efficient operations over a three-year period (FY 2025-26 to 2027-28). The scheme specifically targets 60 energy-intensive clusters across 14 diverse sectors, including brass, bricks, ceramics, chemicals, food processing, leather, pharma, steel re-rolling, and textiles, among others.

Key Components

Interest Subvention: Micro and Small Enterprises receive a 5% interest subsidy, and Medium Enterprises receive a 3% subsidy on bank loans taken for energy efficiency technology adoption.
Technical Handholding: Support includes Investment Grade Energy Audits (IGEA), preparing Detailed Project Reports (DPRs), and ongoing monitoring and verification after implementation.
Comprehensive Project Support: End-to-end assistance is provided, from awareness-building and audits to documentation, funding facilitation, and post-implementation evaluation.
Eligibility: MSMEs must be registered under the Udyam portal and operational in one of the identified clusters and sectors. Loans eligible under the scheme range from ₹10 lakh to ₹15 crore, with up to 75% of the project cost eligible for debt funding.

How the ADEETIE Scheme Benefits MSMEs

Reducing Operational Costs: Energy expenses make up a hefty portion of MSME operational costs. By deploying advanced, energy-efficient technologies, MSMEs can achieve a 10% minimum energy savings, with potential for up to 30–50% savings in some cases. This reduction in power consumption translates directly to lower production costs and improved profitability.

Easing Financial Barriers: The interest subvention feature substantially reduces borrowing costs, making upgrades and technological transitions more attainable for MSMEs. For eligible projects, the government covers a portion of the loan interest, alleviating the financial pressure of capital investment in new technology.

Enhancing Global Competitiveness: Investing in energy-efficient technology improves both the quality and reliability of goods manufactured by MSMEs, enabling them to compete not just locally but in international markets. Increased productivity and process optimisation further bolster their competitive edge.

Promoting Environmental Sustainability: ADEETIE directly supports India’s climate commitments, including the target of reducing emission intensity by 45% by 2030. By lowering carbon footprints across industrial clusters and supporting sustainable industrialisation, MSMEs play a significant role in national environmental objectives.

Empowering MSMEs with Technical Expertise: The scheme’s empanelled Certified Energy Auditors provide MSMEs with sector-specific, actionable insights for tailored technology upgrades. Continued post-implementation support ensures these productivity and efficiency gains are sustained.

Implementation Mechanics

MSMEs can access the scheme via a dedicated portal. The process includes:

Registration and eligibility verification;
Application for an energy audit.
Preparation of a DPR outlining energy-saving interventions;
Access to subsidised loans via partnered financial institutions.

Pilot projects have already showcased impressive energy savings and operational improvements in clusters such as gold, jewellery, and food processing in Andhra Pradesh, setting positive precedents for wider adoption.

The ADEETIE scheme represents a pivotal opportunity for MSMEs in India. By combining financial incentives, expert technical support, and structured project handholding, ADEETIE empowers MSMEs to modernise, reduce costs, and enhance their competitiveness—all while contributing to the nation’s sustainability and climate goals. As industrial India moves towards a cleaner, greener, and more efficient future, the ADEETIE scheme stands as a critical facilitator of growth and transformation.

The ADEETIE Scheme: Transforming India’s MSMEs through Energy Efficiency. India’s Micro, Small, and Medium Enterprises (MSMEs) form the backbone of the national economy, contributing significantly to employment and industrial output. Yet, energy costs and outdated technologies have often impeded MSMEs’ growth and competitiveness. The Ministry of Power, in collaboration with the Bureau of Energy Efficiency (BEE), has launched the Assistance for Deployment of Energy Efficient Technologies in Industries and Establishments (ADEETIE) scheme. This transformative initiative aims to equip MSMEs with the tools, support, and financial access needed to adopt energy-efficient technologies and thrive in the competitive industrial landscape.

Overview of the ADEETIE Scheme

The ADEETIE scheme is a central sector program with a budget outlay of ₹1,000 crore, focusing on guiding MSMEs towards energy-efficient operations over a three-year period (FY 2025-26 to 2027-28). The scheme specifically targets 60 energy-intensive clusters across 14 diverse sectors, including brass, bricks, ceramics, chemicals, food processing, leather, pharma, steel re-rolling, and textiles, among others.

Key Components

<ul>
 <li>Interest Subvention: Micro and Small Enterprises receive a 5% interest subsidy, and Medium Enterprises receive a 3% subsidy on bank loans taken for energy efficiency technology adoption.</li>
 <li>Technical Handholding: Support includes Investment Grade Energy Audits (IGEA), preparing Detailed Project Reports (DPRs), and ongoing monitoring and verification after implementation.</li>
 <li>Comprehensive Project Support: End-to-end assistance is provided, from awareness-building and audits to documentation, funding facilitation, and post-implementation evaluation.</li>
 <li>Eligibility: MSMEs must be registered under the Udyam portal and operational in one of the identified clusters and sectors. Loans eligible under the scheme range from ₹10 lakh to ₹15 crore, with up to 75% of the project cost eligible for debt funding.</li>
</ul>

How the ADEETIE Scheme Benefits MSMEs

Reducing Operational Costs: Energy expenses make up a hefty portion of MSME operational costs. By deploying advanced, energy-efficient technologies, MSMEs can achieve a 10% minimum energy savings, with potential for up to 30–50% savings in some cases. This reduction in power consumption translates directly to lower production costs and improved profitability.

Easing Financial Barriers: The interest subvention feature substantially reduces borrowing costs, making upgrades and technological transitions more attainable for MSMEs. For eligible projects, the government covers a portion of the loan interest, alleviating the financial pressure of capital investment in new technology.

Enhancing Global Competitiveness: Investing in energy-efficient technology improves both the quality and reliability of goods manufactured by MSMEs, enabling them to compete not just locally but in international markets. Increased productivity and process optimisation further bolster their competitive edge.

Promoting Environmental Sustainability: ADEETIE directly supports India’s climate commitments, including the target of reducing emission intensity by 45% by 2030. By lowering carbon footprints across industrial clusters and supporting sustainable industrialisation, MSMEs play a significant role in national environmental objectives.

Empowering MSMEs with Technical Expertise: The scheme’s empanelled Certified Energy Auditors provide MSMEs with sector-specific, actionable insights for tailored technology upgrades. Continued post-implementation support ensures these productivity and efficiency gains are sustained.

Implementation Mechanics

MSMEs can access the scheme via a dedicated portal. The process includes:

<ul>
 <li>Registration and eligibility verification;</li>
 <li>Application for an energy audit.</li>
 <li>Preparation of a DPR outlining energy-saving interventions;</li>
 <li>Access to subsidised loans via partnered financial institutions.</li>
</ul>

Pilot projects have already showcased impressive energy savings and operational improvements in clusters such as gold, jewellery, and food processing in Andhra Pradesh, setting positive precedents for wider adoption.

The ADEETIE scheme represents a pivotal opportunity for MSMEs in India. By combining financial incentives, expert technical support, and structured project handholding, ADEETIE empowers MSMEs to modernise, reduce costs, and enhance their competitiveness—all while contributing to the nation’s sustainability and climate goals. As industrial India moves towards a cleaner, greener, and more efficient future, the ADEETIE scheme stands as a critical facilitator of growth and transformation.