India may require financing to the tune of $2.5 trillion by 2030 for climate transition, given its pledge to achieve net-zero emission by 2070, the government said on Wednesday.
“India’s climate finance taxonomy will facilitate greater resource flow to climate-friendly technologies and activities, enabling India to achieve the vision of being Net Zero by 2070, while ensuring long-term access to reliable and affordable energy,” the department of economic affairs said in a draft paper on “India’s Climate Finance Taxonomy.”
However, the report did not reveal any specific tax measures to be taken to support the green transition. Those details are understood to have been shared with experts.
The framework is aimed at greater resource flow to climate-friendly technologies and activities. Preventing “green-washing” – deceptive or exaggerated claims about the environmental benefits of products or services– is also a key goal.
The public feedback on the draft is sought by June 25, 2025.
To begin with, power, mobility, and buildings will be part of the taxonomy, in the context of climate mitigation and adaptation benefits. Agriculture, food and water security will be in the context of climate adaptation and resilience building. As for addressing transition, in line with country circumstances, in hard-to-abate sectors, iron and Steel and Ccment would be be considered at the outset.
Specifically, the taxonomy will cover technologies, measures, projects and activities that are aligned to: mitigation. This includes improvements in energy efficiency or reduction in emission intensity, and avoidance of GHG emissions including through the expansion of non-fossil fuel energy, etc.
It would support adaptation- action that enhances resilience, including sustainable water management, ecosystem protection and restoration, and geography-specific adaptation measures to lower the negative impacts of climate change.
Transition activities in line with the specific pathway for hard-to-abate industries, innovation and R&D facilitate low carbon pathways considering the available technology, its access and viability.
“Meeting its updated NDC targets requires an estimated $2.5 trillion (at 2014–15 prices) by 2030. To bridge this significant financing gap, access to affordable finance and advanced technology—particularly from developed countries, as stipulated under the UNFCCC and the Paris Agreement—is critical for sustaining and scaling India’s climate efforts,” according to the report.
India’s proactive measures have yielded positive results, with many targets under its first Nationally Determined Contribution (NDC) achieved ahead of schedule. India achieved 40% cumulative electrical power installed capacity from non-fossil fuel sources in 2021, well before the 2030 target.
Similarly, the emission intensity of GDP was reduced by 33% from 2005 levels by 2019—nine years ahead of the target year. Recognising the progress, India revised its NDC in August 2022, enhancing the target to reduce GDP emission intensity to 45% (up from 33-35%) by 2030 and increasing the arget for non-fossil fuel-based cumulative electric power installed capacity to 50% (from the earlier 40%). India has successfully established an installed electricity generation capacity of 222.85 GW from non-fossil fuel sources, which account for 47.4% of the total capacity as of 28 February 2025.
