Transforming sustainability of Indian small and medium-sized enterprises through circular economy adoption

Abstract

Circular Economy (CE) adoption in Indian SMEs is still nascent, irrespective of various initiatives, policies, and trans-national strategic partnerships of the Indian government. The existing research has outlined the benefits of CE adoption within organisations (regardless of the size and sector) to achieve sustainable business performance in emerging markets. This paper employs resource-based view as a theoretical lens to examine the factors influencing and inhibiting CE adoption in Indian manufacturing and process-based SMEs by conducting twelve case-studies. The within and cross-case analysis shows that lack of business process analysis, skills and expertise, digital transformation and multi-stakeholder cooperation within the supply chain inhibits CE adoption, while government initiatives, competitive advantage, environmental regulation, and customer pressure are the drivers. The study proposes a CE implementation guide comprising six principles for the SMEs’ managers in India to achieve resource efficiency, cost savings, multi-stakeholder collaboration and sustainable outcomes across the CE fields of action.