<p>Reducing carbon emissions is widely acknowledged as a crucial objective and a primary focus of sustainable development goals. This study computed the carbon emissions intensity for the organized Indian manufacturing sector and examined its convergence using Phillips and Sul’s methodology. It used the Annual Survey of Industries factory-level datasets from 2001–2002 to 2021–2022 to estimate carbon emission intensity for major Indian states. The estimates reflect that the carbon intensities converge to different steady levels due to the presence of heterogeneity in the carbon emission intensity. Furthermore, the presence of several clubs within the states may be attributed to the variability in the industrial structure and intensity in the regions. This study aims to enhance policymakers' understanding of the structure and formulation of energy policies, emphasizing the need to see clusters as distinct entities rather than treating them as a single unit. In addition, it addresses the existing research gap by measuring India's manufacturing sector's CO₂ emissions intensity convergence at the aggregate and regional levels for designing effective carbon reduction policies.</p>