Despite the fact that the informal economy accounts for about two thirds of GDP and 90% of employment in India , the informal economy seems absent from almost all discussions of any kind of low carbon revolution in the country. Does it play such a negligible role in pollution as many have assumed and would it be an obstacle to a low carbon revolution. This paper focuses on the sector’s own capacity to adopt the kind of technological and organisational changes that would be needed in order to innovate and asks whether and how innovation takes place in the informal economy.