Gear Hobbing is widely used process to produce spur gears in both mass and batch production for automotive and machine tool applications with dimensional accuracy. The performance characteristics of spur gears in terms of dimensional accuracy are responsible for smooth operation, low transmission error, and high efficiency. While manufacturing spur gears by hobbing process, neat mineral based cutting oil in flooded condition is generally used to reduce the friction at the hob-work piece interface and to remove the heat at the cutting zone. Due to usage of mineral based cutting oil in flooded condition, there is always an issue of economic and environmental sustainability. In this research work, flooded lubrication performance was compared with minimum quantity lubrication (MQL) in terms of dimensional accuracy and productivity in order to determine the opportunity and challenges under both the lubrication conditions. Mineral based and vegetable based cutting oil (soyabean oil with 5% EP additives) was used under flooded and MQL conditions respectively. Optimum input parameters in terms of hob speed (rpm), axial feed (mm/rev) and flow rate under both flooded and MQL are obtained for microgeometric deviations, MRR. ANOVA and regression analysis was done using RSM in order to find the relationship between input parameters and output responses. The results indicates that MQL performance was better than flooded in terms of microgeometric deviations and MRR under low and medium range of hob speed with different feed rate. But under high value of hob speed with different feed rates, the performance of flooded lubrication was found better than MQL. After analyzing the results, opportunities in terms of productivity and dimensional accuracy improvement were determined. Similarly challenges in terms of cutting temperature reduction, cost reduction and sustainability management were determined.