All we are facing the problems of global warming caused by excess emission of GHGs in the atmosphere. Out of three flexible mechanisms as suggested by the Kyoto Protocol, Emission Trading System (ETS) is the most important tool to fight global warming.  In this backdrop this study tries to identify the present status of Emission Trading Scheme in India and the advantages and disadvantages of the ETS. The study is descriptive in nature and based on secondary data.  From the study it is found that India has successfully introduced the Perform, Achieve and Trade (PAT) scheme to increase energy efficiency in high energy consumed industries in a phased manner from 2012. Now, India has launched world first ever particulate pollution scheme on pilot basis in Surat in 2019 to reduce air pollution in the city caused by different industries. ETS has different advantages like certainty in emission reduction, flexibility in selection of different alternatives etc. On the other hands ETS has also different disadvantages like high transaction cost, complexity of the scheme, free rider problems etc. Keywords: Emission trading, GHGs, Perform, Achieve and Trade (PAT), Free rider problem, renewable energy etc.