and knowledge constraints, at cluster or firm level. A top-down approach, based on sanctions alone is inappropriate; instead compliance-based strategies are also needed to address the constraints of the
firms in the particular sector. This article first describes India's environmental policy, which has resulted in many small industries being relocated or put out of business, as well as a general negative
perception of environmental improvements on the part of small industries. Three case studies of polluting small firms are described: acid-processing; lead-smelting and glass manufacturing, and in each case
the constraints to change are identified. In many cases improvements can be introduced at low cost, and may result in efficiency gains, but until the business owners appreciate that they may benefit from
the technological changes they are unlikely to participate. This article suggests the type of participatory activities that would go towards addressing these firms' constraints; and recommends a shift in
government policy so as to address the problem of environmental improvement in a more effective manner.