Abstract: This study analyzes the transition dynamics of energy productivity in manufacturing activities across twenty-four Indian states and territories (S&Ts) from 1999-2020 using the plant-level data provided by the Annual Survey of Industries. We examine this study in two parts: first, the clustering of states with similar transition patterns at overall manufacturing, technological classification (i.e., low, medium, and high), and industry-wise. We find evidence of multiple clubs in industries like Aluminium, Chemicals, Fertilizers and Pesticides, Iron and steel, paper and pulp, and textiles under the Perform, Achieve, and Trade (PAT) category, except the Cement industry, which shows full sample convergence. Similarly, non-PAT industries, such as electrical equipment, gems and jewellery, machinery products and equipment, rubber and plastics, show evidence of multiple clubs. Second, we explore the determinants of club membership of S&Ts in the manufacturing industry. We find that initial energy productivity, average per capita income, and urbanization rate increase the likelihood of S&Ts being a part of the higher club, controlling for industry-fixed effects. However, location quotient, fuel concentration, and MSME units increase the possibility of states being pushed to the lower club. This study's findings suggest that regional differences drive energy productivity inequality, underscoring the limitations of a uniform policy approach compared to tailored industry-region targets. Policymakers must specify differentiated targets for these S&Ts based on their club membership. Members of high-performing clubs have a relatively lower scope of improvements in energy productivity than low-performers. 

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