This study explores the impact of environmental awareness and economic incentives on individual sustainable living practices, focusing on the role of sustainable infrastructure and government policies. The research aims to understand how these factors interact to promote sustainable behaviour among individuals in India. Specifically, it investigates (1) the influence of environmental awareness on sustainable living practices and access to infrastructure, (2) the effect of economic incentives on sustainable practices and government policies, (3) the role of sustainable infrastructure in shaping individual sustainability efforts, and (4) the impact of government policies in fostering sustainable lifestyles. A structured questionnaire was distributed between June and December 2024, using a convenient sampling method, resulting in 400 fully completed responses. The study employed Confirmatory Factor Analysis (CFA) to validate the measurement model, ensuring reliability and validity through Cronbach’s alpha, composite reliability, and discriminant validity tests. The model fit was confirmed using indices such as CMIN/DF, CFI, AGFI, SRMR, RMSEA, and Pclose. Findings reveal that economic incentives significantly impact both access to sustainable infrastructure (0.544) and government policies (0.477), highlighting the importance of financial motivations in sustainability adoption. Environmental awareness positively affects access to sustainable infrastructure (0.094) but does not significantly influence government policies. Interestingly, environmental awareness does not directly contribute to individual sustainable living practices (− 0.067), whereas economic incentives (0.296) and access to sustainable infrastructure (0.045) show significant positive effects. These results emphasize the necessity for stronger policy interventions and financial incentives to encourage widespread adoption of sustainable living practices.