India, recognising the challenge of pursuing rapid economic growth in a sustainable manner, has developed an energy efficiency scheme to govern large energy consumers. Energy efficiency measures can support India's development priorities while yielding climate co-benefits. There is a significant potential to improve efficiency in energy-intensive industries and the electricity sector, which together were responsible for about 60% of India's greenhouse gas emissions in 2007. The Perform, Achieve and Trade (PAT) scheme aims to tap in this potential. Energy efficiency measures under PAT will help reduce emissions by 26 million tonnes of carbon dioxide equivalent (CO2e) by 2015, thus contributing to the national target of 20–25% reduction in carbon intensity from 2005 levels by 2020. This brief provides an overview of the scheme, examines key issues related to its design and implementation, and concludes with some early lessons for countries considering similar initiatives.