Greenwashing has become a significant issue in modern sustainable marketing, especially in emerging consumer markets like India, where increasing environmental consciousness has led to a higher demand for eco-friendly products. Despite a growing corporate focus on green marketing, misleading environmental claims often deceive consumers by creating inflated perceptions of ecological responsibility. This results in the false green halo effect, where consumers assume broader environmental benefits from limited or misleading green signals. Such skewed perceptions may then trigger green moral licensing, a psychological process where individuals justify future unsustainable actions after engaging in what they perceive as environmentally responsible behavior. While previous research has mainly focused on the direct effects of greenwashing on consumer trust, purchase intentions, and skepticism, there has been limited exploration of its deeper psychological impacts and their implications for sustainable consumption. This conceptual paper proposes a theoretical framework that connects greenwashing and green premium pricing with the false green halo and green moral licensing in the Indian consumer context. The study introduces the “Green Justification Loop” concept to explain how misleading environmental claims and premium-priced green products might indirectly lead consumers to rationalize unsustainable behaviors. By incorporating insights from cognitive dissonance theory, the paper provides a new explanation of the psychological pathways involved in deceptive green marketing. The proposed framework contributes to the literature on green marketing and consumer behavior by identifying key areas for future empirical research and offering implications for policymakers and companies aiming to promote genuine sustainable consumption practices in India