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The Indian government has launched a draft climate taxonomy to encourage investment into green technologies and help the country cut carbon emissions.
India’s ministry of finance and department of economic affairs are seeking comments on the draft framework by 25 June.
“India’s climate finance taxonomy aims to facilitate greater resource flow to climate-friendly technologies and activities, enabling the country to achieve the vision of being net zero by 2070 while also ensuring long-term access to reliable and affordable energy,” the finance ministry said in a statement.
Many governments have introduced green taxonomies or classification systems to help identify sustainable projects. Singapore, China and Europe last year launched an initiative to compare their respective taxonomies and facilitate cross-border green loans and bonds.
The draft said India would seek alignment with global taxonomies while taking into account the country’s unique economic circumstances.
“This approach will facilitate both domestic and foreign financial institutions in identifying investment opportunities in climate-related activities and will also help mitigate the risk of greenwashing,” the draft said.
More than 80% of India’s 1.4 billion-strong population live in areas vulnerable to climate-induced disasters, according to the World Bank. In 2021, the country pledged to reach net zero by 2070.
The taxonomy will cover technologies, measures, projects and activities aimed at helping the country mitigate and adapt to climate change, while also supporting the transition of hard-to-abate sectors such as iron, steel and cement.
The draft notes that India needs to invest about US$250bn a year in the energy transition, although this does not include the cost of infrastructure for electric vehicles or new iron and steel plants.
Reserve Bank of India (RBI) governor Sanjay Malhotra said in March that financial institutions in India should set up a pool of bankable projects to promote investment in green technologies.
This page was last updated May 16, 2025
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