Climate Bonds Initiative (Climate Bonds) in collaboration with MUFG Bank (MUFG) and under the aegis of the India Initiative on Climate Risk and Sustainable Finance (IICRSF), has released India Sustainable Debt State of the Market 2024. The report provides a comprehensive analysis of India’s green, social, sustainability and sustainability-linked (GSS+) debt universe and sets out the opportunities and actions required to fuel India’s low-carbon, inclusive growth story.
India ranks as the fourth-largest emerging market source of aligned GSS+ debt globally, following China, South Korea, and Chile, with cumulative issuance reaching $55.9 billion by December 2024, up 186% from $21.4 billion in 2021. Green bonds remain the powerhouse of activity, accounting for 83% of total aligned issuance, but the market is rapidly diversifying in terms of themes, instruments and issuer types.
India’s overall climate investment need stands at $1.3 trillion by 2030, with $756 billion expected from private sources, opening up space for both infrastructure-scale and innovative financing models. Decarbonising steel and cement alone will require $650 billion, presenting one of India’s largest opportunities for transition-aligned capital.
Neha Kumar, Head of South Asia, Climate Bonds Initiative, commented: “We are witnessing a moment of inflexion. Bolder ambition and catalytic partnership between policy and market actors will remain the staple ingredients to actualise the potential for exponential growth in the Indian sustainable debt market.”
Colin Chen, Head of Sustainable Finance for APAC, MUFG Bank, commented: “This report confirms the opportunities in India’s sustainable finance market. We expect stronger client flows as businesses further embed sustainability into their portfolios, and MUFG is ready to deploy capital and expertise to turn those opportunities into measurable environmental progress.”
Banks and NBFCs are exploring innovative structures bundling rooftop-solar, e-mobility and waste-management assets into portfolio financings that are subsequently refinanced through labelled bonds and loans.
SEBI’s enhanced BRSR Core requirements, the RBI Green Deposit Framework, IFSCA sustainable finance guidance and a forthcoming national climate taxonomy are standardising disclosures and boosting investor confidence, the report observed.
