Enhancing Energy Efficiency of Indian Manufacturing Enterprises: Role of Energy Prices and Firms’ Social and Environmental Consciousness

The article examines whether energy consumption and energy intensity of manufacturing enterprises in India are significantly impacted by energy prices, also studying the impact of non-price factors. Data on industrial plants and manufacturing companies are used for two components of the analysis: one addressing the impact of energy prices on energy demand, and the other addressing the impact of non-price factors on energy intensity. Although several studies have reported moderate-to-low price elasticities of industrial power demand in India (ranging from –0.2 to –0.6), we estimate that the price elasticity of energy demand in India’s energy-intensive manufacturing industries is about –1.3. The results indicate that export-oriented manufacturing firms in India have lower energy intensity than non-exporting firms; this finding aligns with similar earlier studies. However, this impact is contingent on firms’ environmental consciousness and commitment. JEL Classification: D21, F18, L60, M14, Q40, Q41, Q42, Q54