SUSTAINABILITY AND INNOVATION IN INDIAN SMES: CHALLENGES, OPPORTUNITIES, AND FUTURE DIRECTIONS

Purpose -This study explores the integration of sustainability and innovation in Indian Small and Medium Enterprises (SMEs), emphasizing their significance in achieving competitive advantage and resilience in a dynamic economic landscape.Design/methodology/approach -The study adopts a qualitative literature review method, examining scholarly and empirical evidence on sustainability practices, innovative strategies, and policy frameworks influencing Indian SMEs.Findings -Findings indicate a growing but uneven adoption of sustainable practices among Indian SMEs.Innovation is largely reactive rather than proactive, constrained by finance, policy clarity, and infrastructure.Practical implications -Policy incentives, green financing, and capacity-building initiatives can empower Indian SMEs to embed sustainability into their business models.Digital transformation emerges as a vital enabler.Originality/value -The paper provides an updated synthesis of sustainability and innovation discourse in Indian SMEs, identifying structural barriers and providing forward-looking strategies tailored to the Indian SME context.