Green Shoots: Sustainability-Driven SMEs Shaping India’s Biodiversity Future

India’s diverse ecosystems support not only its environment but also a wide range of economic activity. As climate and biodiversity concerns rise globally, an increasing number of Indian small and medium enterprises (SMEs) are aligning their operations with principles of ecological sustainability.

On the occasion of International Day for Biological Diversity (May 22), the team at SME Communities felt it worth examining how SMEs across agriculture, natural products and circular economy sectors are responding to the growing demand for biodiversity-friendly business practices. These enterprises, many of them based in rural and semi-urban India, are leveraging local knowledge, low-impact innovation and global certification pathways to combine economic viability with environmental stewardship.

Biodiversity as a Business Factor

Biodiversity is closely tied to the productivity and resilience of several SME-relevant sectors, including agriculture, food processing, natural wellness and textiles. Changes in ecosystem health – from soil fertility and pollinator populations to water availability – directly impact cost structures, raw material supply chains and long-term business continuity.

As a result, SMEs in certain categories are beginning to integrate biodiversity into their core operations. This shift is driven by a combination of consumer demand, regulatory change, export compliance requirements and long-term resource security concerns.

Agri-Tech and Biodiversity-Conscious Farming

Several agriculture-focused startups and SMEs in India are enabling biodiversity-positive farming practices through technology and advisory services:

Precision farming tools are being used to optimize water and nutrient usage while minimizing chemical inputs, helping reduce stress on local ecosystems.
Soil health monitoring and crop diversification models are being promoted by platforms that work with smallholder farmers.
A number of ventures are also encouraging the use of indigenous seed varieties, organic inputs and natural pest control, contributing to on-farm biodiversity and long-term soil regeneration.

These approaches align with the broader shift toward climate-resilient and resource-efficient agricultural practices across India’s emerging agri-tech landscape.

Natural Products and Local Resource Stewardship

India’s biodiversity-rich regions, including the Western Ghats, Northeast and Eastern Himalayas, are home to a variety of SMEs engaged in producing herbal, wellness and personal care products derived from natural ingredients.

Many of these enterprises rely on community-based sourcing models that incorporate wild-harvested herbs, forest botanicals and traditional plant-based remedies.
Companies in this space are increasingly investing in sustainable harvesting practices, habitat conservation and fair-trade arrangements with indigenous communities.
The rise in demand for ecologically certified products, including those labeled organic, ayurvedic or cruelty-free, has also influenced the sourcing and production methods of small-scale wellness businesses.

This intersection of biodiversity, traditional knowledge and market innovation continues to open up new opportunities for SMEs in global niche markets.

Organic Exporters and Biodiversity-Focused Standards

India’s organic export sector, which includes items such as basmati rice, tea, spices and essential oils, has seen the emergence of numerous SMEs working under certified biodiversity-friendly production standards.

Certification schemes such as USDA Organic, EU Organic and NPOP (National Programme for Organic Production) emphasize biodiversity conservation practices at the farm level.
Group certification and cooperative-led value chains allow small producers to participate in export opportunities while meeting traceability and sustainability norms.
Several SMEs have adopted internal control systems (ICS) and digital farm mapping to support compliance with global biodiversity and sustainability expectations.

While certification remains resource-intensive, its long-term benefits include improved international market access, price premiums and reputational advantages.

Circular Economy Enterprises and Resource Recovery

SMEs in the circular economy space are addressing biodiversity impacts by focusing on resource efficiency and waste reduction:

Enterprises converting agricultural residues into packaging materials, biofuels or soil enhancers are helping reduce biomass waste while offering alternatives to synthetic inputs.
Apparel and textile SMEs engaged in upcycling post-consumer fabric or using low-impact dyes contribute to reduced water contamination and lower resource extraction from biodiversity-sensitive areas.
New business models based on compostable packaging, plastic alternatives and product life extension are reducing pressure on landfills and marine ecosystems.

This segment reflects a growing alignment between sustainability goals and market innovation, particularly in consumer-facing industries.

Policy Landscape and Ecosystem Support

Various national and international frameworks are shaping SME engagement with biodiversity:

The National Biodiversity Authority (NBA) oversees implementation of the Biological Diversity Act, encouraging Access and Benefit Sharing (ABS) protocols for enterprises utilizing biological resources.
Initiatives such as Mission Organic Value Chain Development in the North East and Paramparagat Krishi Vikas Yojana (PKVY) provide support for sustainable and organic farming methods.
Government partnerships with international organizations like the United Nations Environment Programme (UNEP) and Global Environment Facility (GEF) are helping build SME capacity for biodiversity integration through training, grants, and incubation support.

However, wider awareness and practical guidance for SMEs on compliance, funding and ecosystem impact assessment remain areas for further development.

Sustainability-driven SMEs across India are playing an increasingly visible role in shaping a biodiversity-conscious business environment. While challenges related to scale, finance and regulatory navigation persist, these enterprises are demonstrating how localized, sector-specific innovations can contribute meaningfully to both environmental conservation and inclusive economic growth.

As India moves toward greener growth models, the role of SMEs in safeguarding biodiversity – through mindful sourcing, regenerative practices and circular business strategies – will be an important component of long-term resilience.

On this International Day for Biological Diversity, recognizing the efforts of these enterprises can help inspire broader industry participation and policy support in making biodiversity a shared priority across the SME ecosystem.