Authors: Mudita Chaturvedi and Divya Malhotra*
India’s NDCs and Climate Diplomacy: India’s Nationally Determined Contributions (NDCs), submitted in August 2022, underscore its dual commitment to development and decarbonization. As the third-largest emitter in absolute terms but with one of the lowest per capita emissions globally, India has sought to frame its climate ambitions within a paradigm of equity and historical responsibility. This duality—between moral leadership and pragmatic developmentalism—has become a cornerstone of India’s climate diplomacy.
India’s updated NDC targets include reducing emissions intensity of GDP by 45% by 2030 (from 2005 levels), achieving about 50% cumulative electric power from non-fossil fuel-based energy sources by 2030, and attaining net zero emissions by 2070. While these targets are ambitious, their articulation within the principle of “Common But Differentiated Responsibilities (CBDR)” signals India’s insistence on a differentiated pathway for the Global South. It is also a tacit challenge to the faltering commitments from some Global North actors, particularly the U.S. withdrawal from the Paris Agreement under the Trump administration, which supports India’s positioning as a reliable climate steward.
Diplomatically, India has pivoted towards climate leadership through coalitions such as the International Solar Alliance (ISA), co-founded with France in 2015, which now has over 100 member countries. More recently, India’s initiative to establish the Global Biofuel Alliance (GBA) at the G20 in 2023 reinforced its role as a convener of green coalitions (ORF, 2024). These moves are not merely symbolic. They reflect an evolving geoeconomic strategy: climate diplomacy as a lever for geopolitical influence, economic diversification, and emerging soft power—especially among the Global South, where many countries resonate with India’s development-first model.
India’s leadership in climate diplomacy also aligns with its broader foreign policy aspiration of becoming a Vishwaguru, or global guide. This is not to be interpreted in messianic terms, but rather as a posture that blends moral authority with practical solutions—particularly in arenas like climate adaptation, energy equity, and loss-and-damage financing where Western leadership has been inconsistent.
Green Economy and the Global South: India’s Strategic Leverage: From an economic lens, India’s climate pathway cannot be seen in isolation from its growth trajectory. The country is set to become the third-largest economy by 2030, and this rise is interwoven with the green economy transition. This includes renewable energy investments, low-carbon manufacturing, and a domestic carbon market being piloted under the Energy Conservation (Amendment) Act of 2022.
India has become the world’s third-largest producer of renewable energy and is rapidly expanding its solar and wind capacities, with solar power alone expected to reach 280 GW by 2030. This green energy push is not only environmentally significant—it is geoeconomically strategic. It reduces fossil fuel import dependencies, lowers trade deficits, and opens new export markets in green tech and carbon credits. With the EU’s Carbon Border Adjustment Mechanism (CBAM) on the horizon, India is positioning itself to shield its industries while benefiting from green value chain integration.
Moreover, India’s approach reflects a distinct developmental template for the Global South: climate action that does not stifle economic aspirations. Unlike Western economies whose decarbonization coincided with post-industrial stagnation, India is advocating for a “green leapfrogging” model—one that uses green infrastructure to catalyze job creation, urban mobility, and energy access (ILO, 2021). India has also emerged as a vocal advocate for climate finance reform. At COP27 and the G20 forums, it pushed for reconfiguring the global climate finance architecture—calling for grant-based funding, technology transfer, and equitable access to capital. This advocacy is rooted in a structural critique of the Bretton Woods institutions and the OECD-led climate financing regime, which often underserve emerging economies (ICC, 2023; CGU, 2025).
At a deeper level, India’s climate positioning reflects a reconfiguration of global economic governance. As advanced economies fail to meet their $100 billion climate finance commitments, India has asserted its right to design and lead new multilateral platforms—from the Coalition for Disaster Resilient Infrastructure (CDRI) to GBA. These platforms are emblematic of India’s vision for a decentralized, polycentric climate order.
While implementation challenges remain—such as regulatory fragmentation, legacy dependence on coal, and fiscal constraints—the momentum is unmistakable. What emerges is not merely India as a “climate follower” but as an agenda-setter that is shaping the terms of global green transition from a postcolonial and developmentalist lens.
Decarbonization Pathways and Ecological Transitions: India’s decarbonization strategy is embedded in a complex socio-ecological matrix, where emissions reductions must align with economic inclusion and ecological integrity. Sectorally, India’s emissions profile is dominated by energy and industry, followed by agriculture and transport. Transitioning these sectors toward low-carbon trajectories involves a nuanced interplay between technological innovation, behavioral change, and institutional reform.
The power sector remains central to India’s emissions trajectory, accounting for nearly 33% of total emissions. In the current year, 2024-25, the country has produced 929.15 MT (provisional) of coal till February 2025, 5.45% higher production compared to the same period in the preceding year, while coal consumption was recorded to be 1,267 MT in the 2023-24 fiscal year, as per Niti Ayog (2024).
Recent power generation cost analyses highlight the economic advantage of solar energy over coal-based alternatives. PM Surya Ghar: Muft Bijli Yojna (Rooftop Solar Installation) is an initiative to develop captive electricity generation capacity for each household. Such policies enhance public engagement in sustainability efforts and align with the Lifestyle for Environment (LiFE) initiative outlined in India’s first NDC proposal. The increasing population drives up housing and energy demand, which in turn stimulates growth in the industrial sector—responsible for around a quarter of India’s total greenhouse gas emissions, as per India’s 2024 Biennial Update Report to the UNFCCC. The Bureau of Energy Efficiency handles The Perform, Achieve, and Trade (PAT) scheme is a market-based mechanism that incentivizes energy efficiency in energy-intensive industries. The scheme sets stringent emission reduction targets and allows trading of energy-saving certificates (ESCerts); PAT has helped reduce industrial emissions while fostering a cost-effective path to decarbonization. Green hydrogen, carbon capture, and circular economy approaches are explored to decarbonize hard-to-abate construction sector-associated industries of steel, aluminum, and cement.
At the ecological frontier, India’s climate commitments increasingly intersect with land use and ecosystem resilience. India’s ecological, economic, and social diversity demands region-based contextual sustainability efforts. Importantly, ecological transitions in India are not just about carbon sequestration. They are about reconfiguring the human–nature relationship, especially in fragile ecosystems like the Western Ghats, Sundarbans, and Himalayan belts. The flagship programs run by the Indian government are Aravali Green Belt Development, proposed in 2024; the Wetland Rejuvenation Program of 2020; and the National Mission of Clean Ganga of 2014. Programs like the National Afforestation Programme and the Green India Mission are being reoriented to contribute to India’s carbon sink goals. However, these initiatives also signal a broader ecological transition where conservation and restoration are integrated with rural livelihoods, water security, and climate adaptation. These areas are increasingly framed as climate assets whose protection offers both mitigation co-benefits and adaptation dividends.
Sustainability Challenges and Climate Innovation: While India’s climate ambitions are bold, translating them into action presents significant structural and institutional challenges.
Public Financial Institutions (PFIs) such as the Power Finance Corporation (PFC), Rural Electrification Corporation (REC), and the Indian Renewable Energy Development Agency (IREDA) are now central to mobilizing domestic green finance. In 2023, REC issued USD 750 million in green bonds—the largest from South or Southeast Asia—to fund clean energy infrastructure. Earlier, PFC launched its USD 400 million green bond in London to support renewable power generation. Sovereign green bonds worth INR 80 billion were also issued by the Government of India in two tranches in 2023, with proceeds earmarked for solar, wind, and public transport infrastructure (World Bank, 2023).
These instruments are creating new low-cost channels for financing India’s green transition. Meanwhile, regulatory initiatives such as SEBI’s Green Debt Guidelines and RBI’s climate disclosure norms are laying the foundation for a green financial system. According to India’s NDC estimates, the country needs approximately USD 170 billion annually for climate action, yet current flows average only USD 44 billion, creating a financing gap of nearly 74 percent. Yet, the financing shortfall remains significant. Bridging this gap will require a coordinated push across public and private sectors, alongside multilateral collaboration and innovation in instruments like blended finance and risk guarantees. These measures will be critical to connecting national climate targets with scalable, on-the-ground implementation. Combined, these instruments are creating new low-cost financing channels for renewable energy, energy efficiency, and sustainable infrastructure—providing a strong foundation for India’s green economy transition. Enhanced regulatory support, including RBI-led disclosure frameworks and SEBI’s green debt guidelines, further dovetails with India’s strategic climate finance push.
India’s startup ecosystem is increasingly venturing into climate tech, from smart grids and battery storage to carbon accounting platforms, regenerative agriculture, and waste management. Government-led initiatives such as Make in India and the Production-Linked Incentive (PLI) schemes for green hydrogen, solar manufacturing, and EVs demonstrate a strategic alignment of industrial policy with climate goals. In this era of machine learning and artificial intelligence, a rise in semiconductor demand is inevitable. The semiconductor industry is known to share 31% of global GHG emissions. The Semicon India Programme aims to increase India’s semiconductor manufacturing and innovation capacities through government financial aid. Government is supporting innovations in water reuse, recycling, and toxic material alternative systems in semiconductor manufacturing processes. Indian Space Research Organisation (ISRO)-led initiatives like the Oceansat and INSAT series enhance regional weather forecasting, disaster preparedness, and support climate-resilient development in the Global South.
Conclusion: At the subnational level, several Indian states have initiated climate action plans (SAPCC) that combine traditional knowledge with scientific modeling. For instance, Sikkim’s organic farming model, Kerala’s flood-resilience planning, and Gujarat’s solarization schemes reflect context-sensitive innovations. These efforts underscore a shift from prescriptive, top-down planning to adaptive, decentralized experimentation. India’s climate innovation ecosystem reflects the broader transformation underway: from compliance-based climate governance to opportunity-driven green entrepreneurship. Bridging sustainability gaps requires institutional reform, inclusive finance, global partnerships, and a cultural shift that normalizes innovation to achieve climate resilience.
*Divya Malhotra is a Delhi-based economist, working on global diplomacy and soft power.
