Abstract

India’s climate journey reflects a balance between development and sustainability. Having made significant progress in renewable energy, emission intensity reduction, and global alliances like ISA, CDRI, GBA, LeadIT, and IBCA, India is emerging as a key climate leader. Despite challenges such as coal dependence, financing gaps, and rising energy demand, it continues to promote equitable climate action. Hosting COP33 in 2028 offers India a chance to amplify Global South voices and champion inclusive, just, and sustainable growth.

Prologue

2022 marks a significant milestone in India’s journey as the country completed 75 years of independence, and Prime Minister Narendra Modi pledged to transform India into a developed nation by 2047^[1]. Given the number of issues India had to deal with and the new mechanisms and processes it had to establish from scratch, many have considered the success of Indian democracy nothing short of a miracle. India continues to develop and lift people out of poverty, year by year, over the last 78 years. 2022 is also essential for another reason; in 2015, India set an ambitious target of deploying 175 GW of renewable energy by 2022. With the nuts and bolts of the green transition still developing, the country made an ambitious call, which, due to the active role played by all stakeholders, provided a spurt for renewable energy growth in the country. Although the country fell short of this target, implementing it showed promising progress towards a clean energy transition by deploying 119 GW of renewable energy capacity (excluding large hydro).^[2] The journey set out the foundation and path for the next set of efforts on climate action and energy transition.

India’s Progress on Climate Action

India is navigating a delicate path between development imperatives and climate responsibility, and in recent years, the country has registered both promising gains and persistent challenges. As of the latest assessments, India’s total greenhouse gas (GHG) emissions stand at approximately 4,195 Mt CO₂-equivalent, representing ~7.6 % of global emissions.^[3] While India remains among the top emitters globally, its per capita emissions are relatively low (~1.85 t CO₂e/year) compared to global averages.^[4] Historically, since 1850, India’s cumulative emissions amount to ~169,900 Mt CO₂e, contributing ~4.6 % of global historical warming.^[5]

In 2023, India updated its Nationally Determined Contribution (NDC) under the UNFCCC framework, pledging to reduce the emissions intensity of GDP by 45% from 2005 levels by 2030 and aiming to have 50% of cumulative installed power capacity from non-fossil sources by 2030.^[6] The government also envisions reaching net-zero emissions by 2070, and emphasises sustainable lifestyles via initiatives such as Mission LiFE (Lifestyle for the Environment).^[7]

On the mitigation front, India has driven rapid growth in renewable energy capacity. By October 2025, total installed renewables (solar, wind, hydro, etc.) had reached ~242 GW, as India marches toward its 2030 target of 500 GW non-fossil capacity.^[8] As of 2023, India’s renewable share (including large hydro) was estimated at ~49 % of total generation capacity, with solar (~123 GW), wind (~52 GW), large hydro (~50 GW), and bioenergy (~12 GW) constituting the mix.^[9] Yet when it comes to actual electricity generation, renewable energy (including large hydro) contributes only ~22 % of total generation, revealing the persistent dominance of coal in dispatch.^[10] Recent capacity addition trends are robust. In fiscal year 2024–25 alone, India added 29.52 GW of renewable capacity (solar leading at ~24 GW), pushing the cumulative solar capacity past 100 GW.^[11] In the first half of FY 26 (April to September 2025), India achieved a record ~25 GW of renewable additions, with solar contributing ~21.7 GW and wind ~3.09 GW.^[12] These additions have enabled India to attain 50 % of its installed power capacity from non-fossil sources, five years ahead of its original 2030 timeline.^[13]

The effect of these changes is visible in emission trends. India’s energy-related CO₂ emissions rose sharply by 5.3 % in 2024, the highest among major economies, fueled by economic growth and increasing electricity demand.^[14] However, in the first half of 2025, India’s power sector CO₂ emissions declined ~1 % year-on-year, thanks to record clean energy additions, lower fossil generation, and favourable weather conditions.^[15] Analysts suggest this may mark a turning point, indicating that emissions in the power sector could peak before 2030 if the trend continues.^[16] Moreover, India’s climate and sectoral policies are beginning to show measurable savings: between 2015 and 2020, policies across power, transport, and residential sectors reportedly avoided ~440 Mt CO₂ emissions.^[17]

According to India’s Fourth Biennial Update Report (BUR-4) to the UNFCCC, submitted on 30 December 2024, India reduced the emission intensity of its GDP by 33% between 2005 and 2019, which is a significant achievement. This reduction is already more than two-thirds of India’s 2030 target under its Nationally Determined Contributions (NDCs), which aims for a 45% reduction from 2005 levels^[18]. The energy sector remains the most significant contributor to GHG emissions, but improvements in energy efficiency, renewable energy deployment, and policy interventions have contributed to the decline in emission intensity. India reported an increase in forest and tree cover, contributing to carbon sequestration and supporting its climate goals.

In summary, India is advancing on multiple fronts: renewables are scaling rapidly, emissions pathways show signs of flattening in the power sector, and climate policies are generating tangible savings. Yet the path ahead is steep — success will depend on swiftly converting capacity gains into dispatchable clean power, restructuring coal reliance, mobilising finance at scale, and mainstreaming decarbonization across all sectors.

Climate Cooperation and International Coalitions

In recent years, India has spearheaded or co-hosted several international coalitions targeting climate mitigation, infrastructure resilience, industrial decarbonization, sustainable energy, and biodiversity conservation. These alliances reflect India’s ambition to play a leadership role in global climate diplomacy while also aligning with national priorities. Among the most prominent functional ones are the International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI), Global Biofuels Alliance (GBA), Leadership Group for Industry Transition (LeadIT), and the International Big Cat Alliance (IBCA).

The International Solar Alliance (ISA) stands as the most mature of these alliances. Launched in November 2015 by India and France at the COP21 summit, ISA was conceived to bring together “sunshine countries” in a collective pursuit of scaling solar energy deployment, mobilising finance, technology aggregation, capacity building, and lowering costs of solar power ^[19]. Over time, its membership has expanded: more than 100 countries have signed the ISA Framework Agreement, with 90+ having ratified it as full members.^[20] The ISA has operationalised its Global Solar Facility (GSF) pilot projects and continues to work on de-risking solar investments, particularly in the Global South.^[21]

Complementing mitigation efforts with resilience goals, the Coalition for Disaster Resilient Infrastructure (CDRI) was launched in September 2019 by India at the UN Climate Action Summit. The aim is to foster infrastructure systems that can withstand climate and disaster risks, thereby reducing economic losses and promoting sustainable development outcomes. As of now, CDRI comprises around 60 members (50 countries and 10 institutional members) and supports more than 180 projects, with a secretariat based in New Delhi. Its work includes technical standards, risk mapping, capacity building, policy dialogue, and project support in member countries.

On the clean energy front, the Global Biofuels Alliance (GBA) was launched in September 2023 on the sidelines of the G20 Summit in New Delhi, championed by India along with nations such as the United States, Brazil, Italy, Argentina, and others.^[22] GBA’s objective is to coordinate international efforts to scale sustainable biofuels, facilitate trade, assist national biofuel programs, and align standards and policies.^[23] As of mid-2025, new countries like Namibia have joined the alliance, illustrating its expanding reach in the Global South.^[24]

To promote decarbonisation of heavy industry, the Leadership Group for Industry Transition (LeadIT) was co-launched by India and Sweden in 2019 at the UN Secretary-General’s Climate Action Summit. The alliance unites governments, industry leaders, and financiers to accelerate pathways for low-carbon heavy industries, especially steel, cement, and chemicals. In December 2023 at COP28, LeadIT entered a new phase—LeadIT 2.0—launching the India-Sweden Industry Transition Platform and enhancing partnerships and policy frameworks for industrial transition. India and Sweden serve as co-chairs, hosting annual summits and expanding global coordination for industry decarbonisation.

In the domain of biodiversity and conservation, India launched the International Big Cat Alliance (IBCA) in April 2023 during the 50th anniversary of Project Tiger, with the vision to coordinate global conservation efforts across seven “big cat” species: tiger, lion, leopard, snow leopard, cheetah, jaguar, and puma.^[25] The Cabinet approved the establishment of IBCA in March 2024. In April 2025, India and the IBCA signed a Headquarters Agreement that locates its secretariat in India and provides legal and institutional support.^[26] As of 2025, IBCA has become an intergovernmental organisation, with over 12 countries formally joining. A first assembly was held in New Delhi, during which leadership structures, work plans, and rules of procedure were adopted.^[27] The IBCA also contributes to climate adaptation, ecosystem resilience, and biodiversity goals by safeguarding habitat integrity, reducing wildlife trade, and promoting collaborative conservation.^[28]

Together, these alliances represent a multi-pronged approach by India: leveraging solar power and biofuels for mitigation; embedding resilience in infrastructure; decarbonising industrial sectors; and protecting biodiversity and ecosystems. While each operates in a distinct domain, there is scope for synergy among them—for example, green infrastructure investments that integrate solar and resilience, or industrial decarbonization that supports sustainable biofuel markets. The real test now lies in translating alliance frameworks and diplomatic momentum into impactful projects on the ground across member countries, ensuring sustained funding, institutional capacity and cross-sectoral integration.

Challenges towards climate action, biodiversity and conservation

India’s climate transition is at a critical juncture — it has achieved substantial momentum in renewable energy and global climate alliances, but structural constraints continue to anchor its carbon trajectory. India has positioned itself as a global leader in climate diplomacy — committing to reduce the emissions intensity of its GDP by 45% from 2005 levels by 2030, achieving its target of 50% of installed electricity capacity from non-fossil sources well ahead of schedule, and aiming to reach net-zero by 2070.^[29] Yet, translating these commitments into sustained emission reductions remains a challenging task due to the following reasons:

1. Dependence on Coal and Fossil Fuels

The single most significant challenge to India’s decarbonization lies in its continued dependence on coal. Coal accounts for nearly 73% of India’s electricity generation and around 44% of total primary energy supply.^[30] Although the share of renewables in installed capacity has surpassed 49%, the actual generation share of clean power remains just ~22% due to intermittency and baseload limitations^[31], reflecting a continuing reliance on coal for energy security and industrial growth.^[32] The entrenched role of coal in employment, regional economies (especially in Jharkhand, Chhattisgarh, and Odisha), and power sector finance makes a “just transition” complex. Closing or repurposing coal plants without robust social protection frameworks risks political and social backlash.

2. Rising Energy Demand and Developmental Pressures

India’s economy is growing rapidly, with energy demand projected to double between 2020 and 2040.^[33] Industrialisation, urbanisation, and increasing per capita income have led to surging demand for electricity, steel, cement, transport fuels, and air conditioning — all highly carbon-intensive sectors. The residential cooling sector alone saw a 292% increase in emissions from 2000 to 2022.^[34] Unlike mature economies, India must expand quality energy access and industrial capacity while decarbonising — a dual challenge that places immense strain on public finances and technological readiness.

3. Financing and Investment Gaps

India’s transition requires an estimated USD 10 trillion between 2020 and 2070 to achieve net-zero emissions. More immediately, Deloitte (2024) estimates India will need USD 1.5 trillion by 2030 for investments in renewable energy, electric mobility, hydrogen, and carbon capture.^[35] However, climate finance flows into India are less than one-tenth of the required level — around USD 44 billion annually versus the needed USD 260 billion.^[36] Barriers include limited concessional finance, currency risks for foreign investors, and the absence of a robust domestic carbon market.

4. Technological and Infrastructure Constraints

India’s transition to clean energy depends on large-scale deployment of technologies such as battery storage, green hydrogen, smart grids, and carbon capture, utilisation and storage (CCUS) — most of which are either expensive or at nascent stages. Grid integration remains a major bottleneck: the addition of transmission capacity is lagging behind renewable growth, leading to the curtailment of solar and wind power in some states.^[37] Moreover, manufacturing localisation for solar modules, wind turbines, and EV batteries remains limited despite production-linked incentive (PLI) schemes. India imported over USD 12 billion worth of solar cells and modules in FY2024, raising concerns about technological dependence.^[38]

5. Industrial and Transport Sector Emissions

The industrial sector accounts for approximately 28% of India’s total GHG emissions, with steel and cement alone contributing nearly half of the industrial CO₂.^[39] Decarbonising these sectors is challenging due to process emissions, high energy use, and a lack of commercially available low-carbon alternatives. Similarly, transport emissions are increasing rapidly: vehicle ownership is expected to triple by 2040, and the share of electric vehicles remains below 5%.^[40] Despite government programs such as FAME-II and ethanol blending targets, infrastructure and affordability barriers persist.

6. Agricultural and Land-Use Emissions

Agriculture contributes around 18% of India’s GHG emissions, mainly from methane (paddy cultivation, livestock) and nitrous oxide (fertiliser use).^[41] Unlike energy, these emissions are diffuse and harder to mitigate. Electrification of irrigation, improved fertiliser efficiency, and sustainable livestock practices remain underfunded. In parallel, forest carbon sinks are under stress due to land-use change, deforestation, and climate-driven productivity declines. Recent studies show a 6.2% reduction in forest productivity despite greening trends.^[42]

7. Institutional and Governance Challenges

While India has a robust policy framework — including the National Action Plan on Climate Change (NAPCC), State Action Plans (SAPCCs), and sectoral missions — coordination, data transparency, and implementation capacity remain weak. Climate budgeting and adaptation planning vary significantly across states. Moreover, local governments often lack the technical expertise to integrate climate considerations into urban and infrastructure planning.^[43]

8. Adaptation and Climate Resilience Gaps

India is one of the world’s most climate-vulnerable countries. It faces frequent heatwaves, floods, glacial melt, and erratic monsoons, all of which are intensifying due to global warming. The economic losses from climate disasters are estimated at USD 87 billion annually, disproportionately affecting poor and coastal communities.^[44] While adaptation initiatives like the Coalition for Disaster Resilient Infrastructure (CDRI) and city-level Climate Action Plans (e.g., Mumbai, Surat) are essential, overall adaptation finance remains below 15% of total climate spending.^[45]

COP 33 – an opportunity for India to amplify emerging economies’ voice, exchange learnings and showcase India’s progress

India has shown willingness to host COP 33 in 2028, which would be an incredible opportunity to showcase India’s progress, exchange learnings and act as a voice of emerging economies on various issues. Following India’s curve, countries around the world need to solve multiple developmental problems and expand their economies, while ensuring no harm to their environment and ecology. While there are still existing challenges and further scope for improvements in many areas, India has made significant strides on the climate front while simultaneously expanding as an economy and ensuring the development of the vulnerable and low-income groups. For example, on the energy front, this includes a massive expansion of the grid and ensuring almost universal access to electricity to households through the Saubhagya scheme.^[46] Through Pradhan Mantri Ujjwala Yojana (PMUY), the country has transformed millions of households by providing deposit-free LPG connections to adult women from poor households. This initiative promotes health through better air quality, environmental sustainability, and women’s empowerment by replacing cooking fuels like firewood and cow-dung cakes.^[47]

On the renewable energy end, India has made exponential progress, and its solar power sector has witnessed an extraordinary 3450% increase in capacity over the past decade, rising from 2.82 GW in 2014 to 100 GW in 2025.^[48] Recently, a solar plus storage project in Morena, Madhya Pradesh, got a record-breaking tariff of ₹2.70/kWh (around US¢3). This was the first time in India that a tariff below ₹3/kWh has been achieved for a firm dispatchable renewable energy (FDRE) project. Through PM Suryaghar Yojana, India has added 6 GW of rooftop capacity across 2 million households in just 1.5 years. Given the scale and similar development context, India can share a lot on policy and regulatory design, bidding and procurement process, etc., with other emerging economies.

India also must utilise its prospective COP presidency to champion equitable climate finance by reinforcing the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), ensuring that Global South countries receive sufficient resources for adaptation and mitigation. As a bridge between developed and developing nations, India can leverage its leadership in alliances like the International Solar Alliance, CDRI, and Global Biofuels Alliance to advocate for enhanced concessional finance, technology transfer, and debt relief mechanisms. By campaigning for fair access to green capital and showcasing scalable low-cost climate solutions, India can strengthen South-South cooperation and help align global financing architecture with the developmental needs of emerging economies.

It will be important for India to emphasise that development itself is the first line of defence against climate calamities and a key tool for resilience and adaptation for vulnerable communities, especially for countries currently at the lower end of the development spectrum. India can utilise the COP opportunity to voice the global south’s perspective on climate action to ensure that international efforts are fair – through adequate flow of finance from developed to developing countries, giving proper importance to resilience and adaptation in climate discussions, and ensuring no one is left behind in this transition.

Author Brief Bio: Anurag Mishra is a public policy professional with over twelve years of experience developing and implementing energy and climate change initiatives across philanthropies, governments, think-tanks and the private sector. Some of his professional accolades include drafting India’s Integrated National Energy Policy, steering a multi-think coalition that led to the launch of India’s Critical Mineral Mission and steering a grassroots initiative focused on power sector reforms

References:

^[1] Mogul, Rhea. “Modi Pledges to Turn India into a Developed Country as Nation Turns 75.” CNN, Cable News Network, 15 Aug. 2022, edition.cnn.com/2022/08/14/india/india-independence-day-75-years-intl-hnk-dst/index.html.

^[2] FactcheckerIn, Divyani Dubey. “Did India Really Achieve Its Goal of 175 Gigawatt of Renewable Energy by 2022?” Scroll.in, 3 Jan. 2023, scroll.in/article/1041018/did-india-really-achieve-its-goal-of-175-gigawatt-of-renewable-energy-by-2022.

^[3] “India’s Progress and Recent Impact.” ClimateChangeTracker.org, www.climatechangetracker.org/nations/greenhouse-gas-emissions/india/progress-and-recent-impact.

^[4] “India’s Historic Contribution to Global Warming Since 1850.” ClimateChangeTracker.org, www.climatechangetracker.org/nations/greenhouse-gas-emissions/india/historical-impact.

^[5] Ibid.

^[6] Leiserowitz, Anthony, et al. “Climate Change in the Indian Mind, 2023.” Yale Program on Climate Change Communication, Yale University, 2024, climatecommunication.yale.edu/wp-content/uploads/2014/05/climate-change-indian-mind-2023.pdf.

^[7] Jha, Vyoma. “India’s Road and the Baku Climate Talks.” Natural Resources Defense Council, https://www.nrdc.org/bio/vyoma-jha/indias-road-and-baku-climate-talks.

^[8] Central Electricity Authority. Executive Summary. Central Electricity Authority, Aug. 2025, https://cea.nic.in/wp-content/uploads/executive/2025/08/Executive_Summary_August_2025.pdf

^[9] Ibid

^[10] NITI Aayog, ICED. “Power Generation.” India Comprehensive Energy Database, NITI Aayog, https://iced.niti.gov.in/energy/electricity/generation/power-generation

^[11] Enerdata / MNRE. “India Adds ~29.52 GW Renewable in 2024-25.” Enerdata, https://www.enerdata.net/publications/daily-energy-news/india-reached-220-gw-new-renewable-energy-capacity-2024-2025.html.

^[12] “Record 25 GW Added in H1FY26, Led by Solar.” Times of India, https://timesofindia.indiatimes.com/city/chennai/renewables-on-a-roll-record-25gw-added-in-h1fy26-led-by-solar/articleshow/124434667.cms.

^[13] Reuters, “India hits 50% non-fossil power milestone ahead of 2030 target.” Retrieved from https://www.reuters.com/business/energy/india-hits-50-non-fossil-power-milestone-ahead-2030-clean-energy-target-2025-07-14/

^[14]IEA, Global Energy Review 2025 – CO₂ Emissions. Retrieved from https://www.iea.org/reports/global-energy-review-2025/co2-emissions

^[15] Reuters / CREA report, “India’s power-sector CO₂ emissions fall ~1 %.” Retrieved from https://www.reuters.com/sustainability/climate-energy/indias-power-sector-co2-emissions-fall-second-time-over-four-decades-report-says-2025-09-17/

^[16] Ibid.

^[17] Council on Energy, Environment and Water (CEEW). “India’s Current Climate Policies Significant, Will Reduce 4 Billion Tonnes of CO2.” Council on Energy, Environment and Water, https://www.ceew.in/press-releases/india%E2%80%99s-current-climate-policies-significant-will-reduce-4-billion-tonnes-co2

^[18] Government of India. India: Fourth Biennial Update Report to the United Nations Framework Convention on Climate Change. UNFCCC, https://unfccc.int/sites/default/files/resource/India%20BUR-4.pdf.

^[19] International Solar Alliance. About Us / Vision & Mission. Retrieved from https://isa.int/about_uss

^[20] Coalition for Disaster Resilient Infrastructure (CDRI). [Untitled PDF document on CDRI website]. CDRI, https://www.cdri.world/upload/pages/1774909922547427_202308220633index_230821_130513.pdf.

^[21] ISA’s Global Solar Facility pilot and project mobilization announcement. isa.int

^[22] “Knowledge Nugget: Global Biofuels Alliance, CDRI, ISA, India.” The Indian Express, https://indianexpress.com/article/upsc-current-affairs/upsc-essentials/knowledge-nugget-global-biofuels-alliance-cdri-isa-india-upsc-10118367/.

^[23] “Knowledge Nugget: Global Biofuels Alliance, CDRI, ISA, India.” The Indian Express, https://indianexpress.com/article/upsc-current-affairs/upsc-essentials/knowledge-nugget-global-biofuels-alliance-cdri-isa-india-upsc-10118367/.

^[24] Vajirao & Reddy IAS Institute. “Namibia Joins India-led Global Biofuels Alliance and CDRI.” Vajirao & Reddy IAS Institute, https://www.vajiraoinstitute.com/upsc-ias-current-affairs/namibia-joins-india-led-global-biofuels-alliance-and-cdri.aspx.

^[25] Launch of IBCA (International Big Cat Alliance) by PM Modi in 2023, its species coverage. National Telecommunications Commission

^[26] Cabinet approval of IBCA; Headquarters Agreement signed in April 2025; location in India. Press Information Bureau

^[27] IBCA becomes treaty-based intergovernmental body; membership and first assembly. timesofindia.indiatimes.com\

^[28] Role of IBCA in climate adaptation, ecosystems, habitat conservation. Press Information Bureau

^[29] Government of India. Updated Nationally Determined Contribution (NDC). (2022).

^[30] IEA. World Energy Outlook 2024 – India Profile.

^[31] Ember. India Power Sector Data 2025. Retrieved from https://ember-energy.org/

^[32] Global Energy Monitor. Coal Plant Tracker – India. (2024).

^[33] BP Statistical Review of World Energy (2024).

^[34] Yan, R. et al. India’s Residential Cooling Transition. (arXiv, 2024).

^[35] McKinsey & Company. Decarbonizing India: Pathways to a Net-Zero Future. (2023).

^[36] Deloitte. India Needs $1.5 Trillion by 2030 for Climate Action. (2024).

^[37] Central Electricity Authority (CEA). Transmission Planning Report 2024–2030.

^[38] Ministry of Commerce (India). Import-Export Database 2024.

^[39] CEEW. Industrial Emissions in India: Pathways to Decarbonization. (2024).

^[40] NITI Aayog. EV Transition Outlook 2024.

^[41] FAO. India GHG Emissions from Agriculture (FAOSTAT, 2023).

^[42] Das, R. et al. Warming Inhibits Increases in Vegetation Productivity in India. (arXiv, 2022).

^[43] TERI. Review of State Climate Action Plans in India. (2023).

^[44] World Bank. Climate Risk Country Profile – India. (2024).

^[45] CDRI. Annual Report 2024: Scaling Resilience Finance.

^[46] Impact and Policy Research Institute (IMPRI). “Saubhagya Yojana: Insights.” IMPRI India, https://www.impriindia.com/insights/saubhagya-yojana/.

^[47] Press Information Bureau (PIB). [Specific document/Press Release regarding Government of India initiatives]. Government of India, Apr. 2025, https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/apr/doc2025430548201.pdf.

^[48] Ministry of New and Renewable Energy. “India Achieves Historic Milestone of 100 GW Solar Power Capacity.” Press Information Bureau, 7 Feb. 2025, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2100603.

 

Introduction

India today stands at a crucial crossroads: a nation dedicated to lifting millions more out of poverty and inequality, while also facing an escalating climate crisis. The key question — whether economic growth and climate action can progress hand in hand or must be in conflict — has never been more pressing.

For decades, India’s development has been portrayed as a race to catch up with the industrialised world, often driven by coal, steel, cement, and other carbon-heavy sectors. However, the reality of climate change shows that copying the Western growth model is neither practical nor sustainable. Likewise, halting development in the name of environmental protection is unfair when millions still lack access to reliable electricity, clean cooking fuel, nutritious food, or decent livelihoods.

This article contends that the dichotomy of “development versus climate transitions” is a false choice. Instead, India’s future relies on integrating climate action into its growth model—through technology, finance, diplomacy, and inclusive governance. Climate action is not a hindrance to development but rather its facilitator: maintaining resilient health systems, safeguarding agriculture, and preserving the demographic dividend.

The Scale of the Challenge

India ranks as the third-largest emitter of greenhouse gases worldwide, accounting for approximately 7% of global CO₂ emissions. However, on a per capita basis, its emissions are less than half the global average and nearly one-seventh of those in the United States. (1) This contrast illustrates India’s unique challenge: it must reduce emissions while still providing development for 1.4 billion people, many of whom still lack basic amenities.

Approximately 230 million Indians still live in poverty according to multidimensional measures. (2) Nearly 40% of the workforce relies on agriculture, a sector highly vulnerable to heatwaves, erratic monsoons, and floods. (3) Public health issues – from air pollution to malnutrition – intersect with climate stresses, heightening inequalities. In this context, slowing economic growth in the name of climate action is politically and socially unacceptable.

But ignoring climate change is just as dangerous. The Intergovernmental Panel on Climate Change (IPCC) warns that South Asia is a regional hotspot for heat extremes, water shortages, and food insecurity. (4) A recent Lancet Countdown report estimates that heat-related deaths among older Indians have risen by 55% in the past two decades, while productivity losses caused by heat exposure cost billions each year. (5) Climate inaction, therefore, risks hindering India’s development progress, damaging human capital and worsening inequality.

Linking Climate and the SDGs

The Sustainable Development Goals (SDGs) provide a perspective on the close link between climate and development. Consider:

• SDG 1 (No Poverty): Climate-induced crop failures and health shocks are among the leading causes driving families back into poverty in India.
• SDG 3 (Good Health): Increasingly, vector-borne diseases such as dengue and malaria are associated with rising temperatures and unpredictable rainfall.
• SDG 5 (Gender Equality): Women, especially in rural India, bear the brunt of water scarcity and fuel shortages, which are exacerbated by climate stress.
• SDG 8 (Decent Work): Outdoor workers, including farmers, construction labourers, and street vendors, lose working hours due to extreme heat, which directly impacts their livelihoods.
• SDG 13 (Climate Action): Clearly, none of the above SDGs can be achieved without incorporating climate resilience.

COVID-19 served as a sobering example of how systemic shocks — many of which are made more probable by climate change — can simultaneously reverse years of progress across the SDGs. The pandemic disrupted education, healthcare, gender equality, and livelihoods all at once. Climate disasters pose a similar cross-sectoral risk.

Public Health as a Climate-Development Nexus

India’s health sector demonstrates vividly why the climate-development trade-off is illusory. Climate change increases disease burdens through heat stress, vector-borne illnesses, malnutrition, and pollution-related diseases. Already, air pollution is the second-largest risk factor for disease burden in India, linked to about 1.6 million deaths annually. (6)

Investing in clean energy and sustainable urban planning is not just “climate action” — it directly reduces hospital admissions, boosts productivity, and improves quality of life. For example, phasing out biomass cooking fuels cuts both carbon emissions and indoor air pollution, saving lives (often of women and children) while also lowering overall emissions.

Similarly, Heat Action Plans (HAPs), developed in Ahmedabad after the deadly 2010 heatwave, combine early warning systems, public awareness, and cooling centres. These measures save thousands of lives each summer while preparing cities for the increasing severity of climate risks. (7) However, most HAPs still overlook mental health impacts, gender-specific vulnerabilities, and their integration into primary care systems. Incorporating these elements can enhance their developmental impact.

Gender and Youth Dimensions

Gender and youth perspectives strengthen the argument. Women, especially in rural India, bear a disproportionate responsibility for water collection, food preparation, and agricultural labour — all sectors heavily reliant on the climate. Studies indicate that climate shocks worsen gender-related burdens and health risks, from anaemia to maternal complications. (8)

Youth, meanwhile, are both India’s strength and vulnerability. With a median age of 28, India’s demographic dividend is seen as its greatest asset. However, climate change threatens to diminish it by shrinking job opportunities, encouraging migration, and exposing young people to health crises. At the same time, youth-led climate activism and innovation remain some of the most influential forces calling for change. Recognising these connections shifts the debate: safeguarding women and youth from climate risks is not just a matter of justice—it is an economic and development imperative.

Therefore, viewing the challenge as “development versus climate” is misleading. Without climate resilience, development progress collapses. Without development, climate objectives lack validity. The way forward involves integration: investing in technology, finance, and diplomacy that promote both climate action and economic growth concurrently.

If India is to demonstrate that development and climate action are not mutually exclusive, technology and innovation must be central to its strategy. Unlike the industrial revolutions of the West, which relied on fossil fuels, India has an opportunity to leap directly into a green development model. The choices it makes in energy, mobility, agriculture, and healthcare will determine whether it can achieve high growth while avoiding the worst climate impacts.

Clean Energy as the Foundation

India has set ambitious renewable energy targets — 500 GW of non-fossil fuel capacity by 2030 and net-zero emissions by 2070. These goals are supported by substantial investments: solar parks across Rajasthan and Gujarat, offshore wind projects in Tamil Nadu, and initiatives to expand green hydrogen production.

Progress is significant. India ranks as the third-largest renewable energy market globally, with solar capacity expanding nearly 30-fold over the past decade. (10) Solar tariffs are now some of the lowest worldwide, rendering renewables cost-competitive with coal. Nonetheless, renewables face challenges such as intermittency, land acquisition, and grid integration. Investment in storage (lithium-ion, pumped hydro), smart grids, and transmission corridors is essential.

Clean energy also offers significant co-benefits for development. Rooftop solar schemes, such as the Pradhan Mantri Surya Ghar Muft Bijli Yojana, aim to lower household electricity bills while reducing emissions. Decentralised solar microgrids in rural Bihar and Uttar Pradesh have energised villages that were traditionally dependent on kerosene. For women and youth, access to reliable power creates opportunities for education, entrepreneurship, and healthcare.

Mobility and Urban Futures

India’s cities—already home to over 460 million people—are choking under pollution and congestion. Transportation accounts for about 13% of India’s energy-related CO₂ emissions. (11) Electric mobility is key to alleviating this burden.

The FAME II scheme (Faster Adoption and Manufacturing of Electric Vehicles) has spurred a surge in EV adoption, with sales of electric two-wheelers doubling in 2023 alone. (12) Metro rail expansions, bus electrification, and bike-sharing programmes are transforming urban mobility in cities like Delhi and Bengaluru. However, uptake remains uneven: EV adoption is concentrated in wealthier states, while charging infrastructure remains limited in rural areas.

Climate-friendly mobility also advances gender and youth equality. Women often face unsafe and unaffordable public transport, which limits their access to work and education. Incorporating electric buses and secure transit corridors into urban planning can cut emissions and help bridge gender disparities. For youth, green mobility sectors — from electric vehicle manufacturing to battery recycling — create new job opportunities, which are crucial for India’s demographic advantage.

Agriculture and Food Systems

Agriculture accounts for 16-20% of India’s greenhouse gas emissions, mainly from livestock, rice cultivation, and fertiliser use. (13) However, it is also one of the sectors most vulnerable, with climate change projected to reduce crop yields by up to 10-40% by 2050, depending on the scenario. (14)

Technological pathways can mitigate both emissions and vulnerabilities:

• Climate-smart seeds resistant to drought and floods are being scaled through ICAR research.
• Precision agriculture, utilising drones, IoT sensors, and AI models, helps optimise fertiliser use, thereby reducing costs and emissions.
• Solar-powered irrigation pumps not only replace the need for diesel but also allow farmers to sell surplus power back to the grid, generating an additional income stream.

These innovations need to be incorporated into nutrition-sensitive policies. Malnutrition remains a major concern, with 35% of Indian children affected by stunting and 57% of women anaemic. (15) Climate-resilient crops such as millets — promoted during India’s G20 Presidency — can improve both sustainability and nutrition.

Digital Health and Climate Resilience

The healthcare sector shows how technology can support both growth and climate resilience. The Ayushman Bharat Digital Mission (ABDM) is creating interoperable health records and telemedicine platforms, already connecting millions of patients to doctors remotely.

Digital tools also enhance climate-health adaptation. Heat action plans can be integrated with telehealth, allowing vulnerable populations to consult doctors during heatwaves. Early-warning systems can connect to mobile apps for farmers and outdoor workers, offering real-time health advice. Furthermore, India’s expanding health-tech startup scene leads in low-cost diagnostics, AI-powered radiology, and tele-nutrition platforms. These efforts help reduce health inequalities and build resilience against climate shocks, which often worsen malnutrition and infectious diseases.

Innovation Ecosystems and Startups

India’s innovation ecosystem is crucial to reconciling economic growth and climate change. With over 100,000 registered startups, India has become the world’s third-largest hub for startups. (16) Among these, cleantech and health-tech are emerging as transformative sectors. Examples include:

• IIT Bombay’s BETiC (Biomedical Engineering & Technology Innovation Centre), which incubates affordable medical devices designed for rural India.
• Agri-tech startups such as DeHaat and Ninjacart utilise AI and supply chain technology to reduce food waste and enhance farmers’ incomes.
• Energy startups are pioneering affordable storage and EV charging solutions.

Public-private partnerships, challenge funds, and incubators can further accelerate these innovations, especially when connected to rural and underserved areas.

Barriers to Overcome

Despite progress, challenges remain. India’s R&D expenditure constitutes only 0.7% of its GDP, compared to 2-3% in countries such as China and the United States. (17) Patent pipelines for green technologies remain limited, and the domestic manufacturing of solar panels and batteries lags behind China.

Furthermore, innovation must be inclusive. Without targeted support, women entrepreneurs, rural innovators, and marginalised youth risk being excluded from the green economy. Initiatives like the Atal Innovation Mission and Startup India need sharper equity perspectives, ensuring that climate-smart innovation is not limited to urban elite enclaves.

Technology serves as India’s bridge connecting development with climate action. Renewable energy, electric mobility, climate-smart agriculture, and digital health are not only tools for cutting emissions but also promote equity, health, and livelihoods. However, expanding these innovations necessitates investment in R&D, inclusive ecosystems, and strong regulation.

India’s ability to demonstrate that development and decarbonization can go hand in hand will depend on how successfully it mobilises innovation — not just in elite labs but across villages, small enterprises, and frontline systems.

Finance and Diplomacy — Mobilising Resources and Shaping Global Norms

No matter how ambitious India’s policies and technologies may be, climate action cannot succeed without adequate financial support. The shift to low-carbon, climate-resilient growth requires trillions of dollars in new investments. Equally important, India’s role in global diplomacy will determine whether financial flows, technology transfers, and climate governance rules are fair for the Global South.

Climate Finance — The Missing Billions

India’s climate investment requirements are vast. The Council on Energy, Environment, and Water estimates that India will need over USD 10 trillion by 2070 to reach net-zero emissions. (18) Yearly requirements amount to hundreds of billions, far outstripping current flows.

However, climate finance to India has been modest and uneven. In 2021, India received approximately USD 44 billion in green finance, which is only a third of the estimated requirement. (19) Furthermore, much of this consists of private debt, raising concerns about affordability and debt stress for developing countries. Grants and concessional finance, essential for adaptation and equity, remain scarce.

The failure of developed countries to meet their USD 100 billion annual climate finance pledge has strengthened India’s call for climate justice. India contends that historically responsible nations must not only fulfil their financial commitments but also offer predictable and transparent methods to increase support.

Domestic Financial Innovations

Even as it pressures the global community, India has mobilised innovative domestic finance. Sovereign green bonds worth ₹16,000 crore (approximately USD 2 billion) were issued in 2023, allocated for clean transportation, renewable energy, and climate-resilient infrastructure. (20) The Reserve Bank of India has also issued guidelines on climate-related risk disclosures, signalling a shift in financial regulation.

Private finance is also contributing. Indian banks are expanding green credit lines, while blended finance structures are attracting private investment alongside concessional capital. The success of the Pradhan Mantri Ujjwala Yojana, which provided LPG connections to over 90 million households, demonstrates how public subsidies can trigger both financial and environmental benefits.

However, systemic barriers still exist. Long-term funding for renewables and adaptation initiatives remains limited. Insurance coverage is low, leaving vulnerable communities exposed to climate shocks. Increasing finance for resilience—such as heat-proofing cities, flood defences, and climate-smart agriculture—continues to be an urgent need.

Diplomacy: From Follower to Agenda-Setter

India’s global climate diplomacy has evolved considerably over the past two decades. Once seen as a hesitant participant during the Kyoto Protocol era, India has now emerged as a leader on this front. Its Presidency of the G20 in 2023 emphasised climate finance, energy transitions, and sustainable development, bringing these issues to the centre of international dialogue.

One of India’s most significant diplomatic achievements is the International Solar Alliance (ISA), co-founded with France in 2015. Today, ISA has over 110 member countries, offering a platform for solar deployment across the Global South. (22) Similarly, India launched the Coalition for Disaster Resilient Infrastructure (CDRI), which now includes 31 member states, providing technical and financial support for resilient infrastructure projects.

At COP28, India played a crucial role in negotiations on the loss and damage fund, emphasising that it must be new and additional finance, not repackaged development aid. These initiatives strengthen India’s dual role: defending the principle of equity while proposing cooperative platforms.

South-South Leadership

For much of the Global South, India exemplifies a credible model of balancing development with climate action. Countries in Africa, Southeast Asia, and Latin America face similar challenges: poverty reduction, energy access, and climate vulnerability. By sharing its experience in solar parks, energy access, and climate-resilient agriculture, India can establish itself as a leader in South-South cooperation.

India has already extended over USD 28 billion in development assistance to partner countries, with a significant portion allocated to Africa and South Asia, and a growing share dedicated to climate projects. (23) BRICS platforms and the New Development Bank further provide vehicles for alternative financial flows that reduce dependence on Western institutions.

Climate Finance and Gender/Youth Dimensions

Finance and diplomacy are not abstract concepts for ordinary citizens — they shape whose voices are heard and whose needs are prioritised. Women and youth are often excluded from climate finance decisions, yet they bear disproportionate burdens. For instance, during heatwaves, women agricultural workers in India experience higher health risks due to outdoor labour, while youth face disruptions to education and livelihoods.

India’s climate diplomacy must therefore prioritise gender and youth in its financial narratives. Dedicated funds for gender-sensitive adaptation, such as water, health, and clean energy, could enhance equity while advancing SDG 5 (Gender Equality) and SDG 10 (Reduced Inequalities). Similarly, mobilising youth as innovators and entrepreneurs in cleantech can leverage India’s demographic dividend for climate leadership.

Barriers and Risks

India’s push for finance and diplomacy faces risks. Protectionist trade measures, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), pose a threat to Indian exporters, particularly those in the steel and cement sectors. If climate measures become tools of trade discrimination, India may find itself penalised even as it struggles to industrialise. Geopolitical tensions further complicate climate diplomacy. India must balance cooperation with developed countries on technology transfer and its roles within the BRICS and Global South blocs, ensuring it is not caught between rival geopolitical camps.

Finance and diplomacy are where India’s climate-development balancing act intersects with the complex realities of power and money. Without trillions in investment, India’s net-zero targets will stay aspirational. Without equity in global governance, the Global South risks being sidelined in a transition designed by and for the developed world. India’s challenge — and opportunity — is to advocate for a fairer financial and diplomatic system while demonstrating credible domestic action. If successful, it can show that development pathways are not a zero-sum game, but rather that climate justice and economic growth can progress together.

Climate change is no longer just an environmental issue; it has become a public health emergency. The Lancet Countdown on Health and Climate Change (2023) reports that India is among the top five countries experiencing the highest heat-related deaths. (24) Heatwaves in 2022 and 2023 have killed hundreds and reduced outdoor labour productivity. Rising vector-borne diseases such as dengue and malaria are spreading into new regions, while floods and cyclones disrupt access to healthcare facilities.

The World Health Organisation estimates that climate change will cause an additional 250,000 deaths annually between 2030 and 2050, mainly due to malnutrition, malaria, diarrhoea, and heat stress. (25) For India, with its dense population and uneven health infrastructure, these risks are amplified. Air pollution alone — closely linked to fossil fuel use — already causes over 1.7 million premature deaths annually in India, representing a significant public health and economic burden. (26)

The public health effects of climate change are closely linked to nutrition and agriculture. Unpredictable rainfall and heat stress considerably decrease crop yields, especially of staples like wheat and rice. This endangers food security for millions and worsens malnutrition, which already impacts over one-third of Indian children under five. (27) Women and children in rural areas face disproportionate risks. Studies indicate that maternal anaemia — affecting over 50 per cent of women of reproductive age in India — worsens due to climate-related disruptions in food and health services. (28) Digital health tools and nutrition dashboards can assist in monitoring vulnerabilities, but without climate-resilient agriculture and food systems, these risks will continue.

Gender affects both exposure to and resilience against climate change. Women are often at the frontline of providing food, water, and household energy in rural India. During droughts or floods, their burdens increase. Research by the UN Development Programme (UNDP) shows that women in India spend up to 200 hours a year collecting water, a time-consuming task that worsens under climate stress. (29) Women continue to be underrepresented in climate decision-making. Fewer than 15 percent of negotiators at UNFCCC meetings from India are women, despite their disproportionate vulnerability. (30) Gender-responsive climate policy is therefore not only an issue of equity but also a practical necessity. For instance, decentralised renewable energy projects led by women’s self-help groups in states like Bihar have boosted both incomes and resilience.

Youth as Climate Stakeholders

With over 65 per cent of its population under 35, India’s youth are both the most vulnerable to climate change and the most capable of fostering innovation. (31) Globally, youth movements — such as Fridays for Future — have shown the strength of civic mobilisation. In India, university-led climate incubators and startups are creating innovations ranging from affordable solar dryers to AI-powered flood prediction models.

However, structural barriers persist, including limited access to finance, a lack of green jobs in rural areas, and inadequate integration of climate issues into education curricula. India’s National Education Policy 2020 emphasises environmental awareness, but implementing this into climate literacy remains slow. (32) Empowering youth requires not just rhetoric but dedicated pathways — fellowships, seed funding, and mentorship programmes that connect young innovators to markets.

COVID-19 as a Teachable Moment

The COVID-19 pandemic clearly demonstrated the interdependence of health, environment, and economic objectives. Lockdowns temporarily reduced emissions, but progress on SDGs such as poverty alleviation, education, and gender equality was significantly rolled back. The World Bank estimates that COVID drove over 70 million people into extreme poverty worldwide.

This comparison is revealing: like pandemics, climate shocks can wipe out years of progress in just a few months. A heatwave that destroys crops or a cyclone that damages infrastructure not only impacts the environment — it also sets back SDGs on hunger, health, gender, and inequality. India’s experience during the pandemic provides a warning: ignoring climate risks is not only an ecological gamble; it is a development risk.

Integrating SDGs and Climate Action

None of the 17 SDGs can be achieved without climate action. Climate change directly jeopardises SDG 2 (Zero Hunger), SDG 3 (Good Health), and SDG 6 (Clean Water and Sanitation). Conversely, progress on SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 11 (Sustainable Cities) helps to strengthen climate resilience.

India’s NITI Aayog SDG Index demonstrates this connection. States that excel in clean energy and infrastructure also show progress in health and gender indicators. (34) Likewise, India’s effort to improve energy efficiency under the Perform, Achieve, Trade (PAT) scheme has lowered industrial emissions while boosting competitiveness. (35) Climate action and development are not competing priorities — they are mutually reinforcing imperatives.

Conclusion

The central question — development versus climate transition: is this a false choice? — finds its answer in India’s journey. Development without climate action is unsustainable, and climate action without development is unjust. The two are inseparable.

India faces a monumental challenge. It must lift hundreds of millions out of poverty, create more job opportunities for youth, promote gender equality, and protect public health — all while decarbonising a vast and expanding economy. Nonetheless, India also has unique strengths: a young population, a vibrant democracy, and the ability for technological innovation.

The path forward requires integration. Climate objectives must be incorporated into every sectoral policy, from health to trade, agriculture to urban development. Finance must support not only solar parks and electric vehicles, but also rural nutrition, women-led enterprises, and youth climate startups. Diplomacy must strengthen the voices of the Global South, while advocating for climate justice and fairness.

The pandemic demonstrated that shocks can reverse progress overnight. Climate change causes a slower yet far more profound disruption. India’s story—and its leadership—will influence not just its own destiny but also that of the Global South. The choice is not between development and climate action; rather, it is whether we recognise, in time, that they are the same fight.

Author Brief Bio: Dr Urvashi Prasad is a Senior Fellow, Pahle India Foundation. She is also an Honorary Professor, De Montfort University, Leicester. Dr Urvashi is a distinguished public policy professional with over 15 years of experience in health, nutrition, gender, sanitation, and development. She has served as Director in the Office of the Vice Chairperson at NITI Aayog, working closely with all three Vice Chairpersons of the Indian government’s premier policy think tank. Dr Urvashi was part of India’s core Covid-19 response team and co-authored the country’s first Voluntary National Review at the UN.

Bibliography

1. International Energy Agency, CO₂ Emissions in 2023 (Paris: IEA, 2024).
2. United Nations Development Programme, Global Multidimensional Poverty Index 2023 (New York: UNDP, 2023).
3. NITI Aayog, Strategy for New India @ 75 (New Delhi: Government of India, 2018).
4. Intergovernmental Panel on Climate Change, Sixth Assessment Report: Impacts, Adaptation, and Vulnerability (Geneva: IPCC, 2022).
5. The Lancet Countdown, Health and Climate Change Report for South Asia (London: Lancet, 2022).
6. Indian Council of Medical Research, Public Health Foundation of India, and Institute for Health Metrics and Evaluation, India: State-Level Disease Burden Initiative (New Delhi: ICMR, 2017).
7. Natural Resources Defence Council and Indian Institute of Public Health, Evaluation of the 2013 Heat Action Plan in Ahmedabad (New Delhi: NRDC, 2015).
8. UN Women, Gender and Climate Change: Asia-Pacific Perspective (Bangkok: UN Women, 2020).
9. Government of India, India’s Long-Term Low Emissions Development Strategy (UNFCCC, 2022).

• International Renewable Energy Agency, Renewable Capacity Statistics 2023 (Abu Dhabi: IRENA, 2023).
• International Energy Agency, World Energy Outlook 2023 (Paris: IEA, 2023).
• NITI Aayog, Annual Report 2023-24 (New Delhi: NITI Aayog, 2024).
• Ministry of Environment, Forest and Climate Change, India: Third Biennial Update Report to the UNFCCC (New Delhi: MoEFCC, 2021).
• Intergovernmental Panel on Climate Change, Special Report on Climate Change and Land (Geneva: IPCC, 2019).
• Ministry of Health and Family Welfare, National Family Health Survey-5 (2019-21) (New Delhi: MoHFW, 2021).
• Department for Promotion of Industry and Internal Trade, Startup India Annual Report 2023 (New Delhi: DPIIT, 2023).
• UNESCO Institute for Statistics, R&D Expenditure Data 2022 (Paris: UNESCO, 2023).
• Council on Energy, Environment and Water, Investment Needs for India’s Net-Zero Pathway (New Delhi: CEEW, 2022).
• Climate Policy Initiative, Landscape of Green Finance in India 2022 (San Francisco: CPI, 2022).
• Reserve Bank of India, Report on Currency and Finance 2023 (Mumbai: RBI, 2023).
• Ministry of Petroleum and Natural Gas, Ujjwala Yojana Progress Report 2023 (New Delhi: MoPNG, 2023).
• International Solar Alliance, Annual Report 2023 (Gurugram: ISA, 2023).
• Ministry of External Affairs, India’s Development Partnership Report 2023 (New Delhi: MEA, 2023).
• Nick Watts et al., “The 2023 Report of the Lancet Countdown on Health and Climate Change,” The Lancet 402, no. 10415 (2023): 2345-2394.
• World Health Organization, Climate Change and Health (Geneva: WHO, 2021).
• Institute for Health Metrics and Evaluation, Global Burden of Disease Study 2019 (Seattle: IHME, 2020).
• UNICEF, The State of the World’s Children 2021: On My Mind (New York: UNICEF, 2021).
• International Institute for Population Sciences, National Family Health Survey (NFHS-5) 2019-21: India (Mumbai: IIPS, 2021).
• UNDP India, Gender and Climate Change: Strengthening Women’s Voices for Resilient Development (New Delhi: UNDP, 2022).
• UN Women, Women’s Participation in Climate Negotiations (New York: UN Women, 2022).
• Ministry of Youth Affairs and Sports, National Youth Policy 2021 Draft (New Delhi: Government of India, 2021).
• Ministry of Education, National Education Policy 2020 (New Delhi: MoE, 2020).
• World Bank, Poverty and Shared Prosperity 2022: Correcting Course (Washington, DC: World Bank, 2022).
• NITI Aayog, SDG India Index and Dashboard 2023-24 (New Delhi: NITI Aayog, 2023).
• Bureau of Energy Efficiency, PAT Scheme: Annual Report 2022–23 (New Delhi: BEE, 2023).

 

India is at a critical juncture in its transition to clean energy. The nation has set ambitious targets: achieving net-zero emissions by 2070, sourcing 50% of its energy from non-fossil fuels by 2030, and ensuring that 30% of new vehicles sold by 2030 are electric. Currently, India’s total installed energy capacity stands at 442 GW, with renewable sources comprising 33% and hydropower contributing 11%. Due to the rapid expansion of renewable energy installations, India remains confident in meeting its 2030 clean energy objectives ahead of schedule.

India’s progress has primarily stemmed from clear and targeted policy incentives. Between 2010 and 2023, the country’s renewable energy capacity grew eightfold, driven by supportive government policies and declining costs of solar and wind technologies. These policies, alongside financial innovations, have encouraged more venture capital investments and created more opportunities for startups and MSMEs. As a result, cleantech expenditure reached USD 68 billion in 2023, a 40% rise compared to the average from 2016 to 2020.

However, these ambitions bring their own set of challenges—chief among them is reducing India’s reliance on imported cleantech components. India’s cleantech manufacturing import dependence across renewable energy, electric mobility and other cleantech sectors’ value chains vary from 20% to 90%; specifically, 80% in Solar, 60% in Wind, 75-90 % in Battery Energy Storage Systems, 60-70% in E-mobility (EV motors and controllers), 90% in Green Hydrogen, and 20-30% in Bio-energy sectors. Without decisive policy action, India’s cleantech imports could surge to USD 85–110 billion by 2030 and as high as USD 140–300 billion by 2040, rivalling the country’s current oil import bill. Reducing this dependence and capturing the economic benefits of the green transition requires indigenizing supply chains and establishing a robust domestic manufacturing base. Policy must address capital costs, supply chain bottlenecks, and constraints in local technology expertise to seize this opportunity. This dependence is more than economic; it is strategic. In a world of techno-nationalism and fragmented supply chains, clean technology has become the new oil. Nations are weaponising critical minerals and tightening export controls. For India, relying on foreign hardware to fuel our green economy is a risk we cannot afford to take. That is why our green transition must be Made in India. As Prime Minister Modi has rightly emphasised, the path to Atmanirbhar Bharat and Viksit Bharat runs through Swadeshi innovation.

To achieve its clean energy objectives, India must realign its policy priorities to expand domestic manufacturing across all relevant sectors. This calls for comprehensive, well-structured interventions throughout the cleantech value chain, including incentivising private investment, expediting adoption among local manufacturers, and addressing areas with lagging progress. By adopting this approach, India can not only advance its energy transition but also enhance economic autonomy and support broader socio-economic development. The nation’s strategic assets, its favourable geographic location, competitive labour costs, and rapid growth in renewable energy, provide a strong foundation for becoming a leading cleantech hub. However, realising this potential requires closing supply chain gaps and maintaining cost-competitiveness in domestic production. Developing a robust cleantech manufacturing ecosystem will rely on advanced local technology, economies of scale, reliable access to raw materials, affordable inputs, sufficient financing, and a skilled workforce. While existing policy measures and private sector initiatives have produced encouraging initial outcomes, a more integrated and large-scale effort is necessary.

The international landscape is undergoing a significant transformation. As nations have pursued “China Plus One” strategies to diversify global supply chains, India has encountered intense competition from other emerging markets in Asia, Latin America, and Africa. To differentiate itself, India should not only strengthen its own capabilities but also adopt an “India Plus Many” strategy, cultivating alliances with like-minded economies to develop diversified, secure, and resilient supply networks. Establishing strategic partnerships will improve India’s competitiveness, expand market opportunities, and reinforce its position as a reliable provider in the cleantech sector. A new approach of going “Swadeshi with Partnership” may be the optimal way forward. Global alliances on finance, technology transfer, and market access should bolster our Swadeshi efforts.

Substantial policy-driven investments are currently underway, exemplified by the Production-Linked Incentive (PLI) schemes that have stimulated domestic output across critical sectors, including solar photovoltaics (PV), advanced battery storage, e-mobility, and green hydrogen. Notably, the solar PLI initiative, with an allocation of USD 3.21 billion, has facilitated integrated manufacturing spanning modules, cells, and wafers. Supplementary strategies, such as safeguard duties and manufacturing-linked auctions, have contributed to a decrease in import reliance, while annual cleantech investment reached a record high of USD 68 billion in 2023.

However, notwithstanding these initiatives, India’s cleantech manufacturing sector continues to face significant challenges. There is an urgent need to promote indigenisation at competitive costs by overcoming hurdles related to infrastructure, raw materials, logistics, and associated expenses—this can be achieved through supply chain partnerships and investments in research and development of affordable climate technologies. Financing remains a significant barrier, as high capital costs and unfavourable risk-return dynamics deter investment. Therefore, establishing long-term, innovative financing mechanisms is crucial to attract both domestic and international capital. Additionally, the sector faces a skilled workforce deficit, making it vital to enhance green skill development and improve the industry’s appeal to talented professionals for roles in supply chain management and emerging cleantech domains.

Furthermore, insufficient investment in research and innovation hinders the development of affordable, locally relevant solutions, underscoring the need for targeted initiatives and collaborative approaches. Dependence on imported upstream components, technologies, and raw materials highlights the need for technology-sharing agreements and the enhancement of domestic manufacturing capabilities. Finally, limited access to advanced machinery and manufacturing technologies continues to constrain the country’s production potential.

National Manufacturing Mission 2025 – including a focus on Cleantech Manufacturing

The National Manufacturing Mission, introduced in the Union Budget 2025, aims to advance India’s ‘Make in India’ initiative by providing comprehensive policy support, strategic execution plans, and a robust governance framework to coordinate activities among central ministries and state governments. In alignment with India’s climate objectives, the mission emphasises cleantech manufacturing, promoting domestic production and strengthening supply chains for critical clean energy components. These components include solar PV cells and modules, electric vehicle batteries and parts, hydrogen electrolysers, wind turbines, ultra-high voltage transmission equipment, and grid-scale batteries. This initiative aims to reduce India’s reliance on imports, enhance energy security, and accelerate the country’s transition to renewable energy.

The mission is structured around five principal pillars, each addressing a critical area of implementation. Its primary objective is to ease the process of doing business by optimising regulatory frameworks and offering incentives to support domestic production. The initiative seeks to develop a future-ready workforce via targeted skill development programmes and collaborative partnerships between industry and academia. Additionally, the mission aims to foster a robust and dynamic MSME sector with increased access to capital and enhanced supply chain integration. Further emphasis is placed on advancing technology through the promotion of research and development, innovation, and technology transfer. Finally, it seeks to elevate quality standards in manufacturing through recognised benchmarks and certification systems, thus enhancing global competitiveness. Collectively, these government-led initiatives underscore a strong commitment to advancing clean technology manufacturing in India.

We have the talent. We have the market. We have the urgency. Now we need clarity of direction and rapid execution. It is time to shape India’s green economy with Indian climate solutions—Make in India, Solve for the World. The Government of India must expedite the unveiling of the institutional architecture of the Manufacturing Mission and get its wheels in motion.

Author Brief Bio: Shri Jagjeet Singh Sareen is a Partner at Dalberg Advisors, based in Delhi, where he leads climate-related projects in the Asia Pacific and globally. Outside of project work, Jagjeet co-hosts the Bharat Climate Forum, a multi-stakeholder platform that brings together ministers, senior policymakers, corporate leaders, financiers, thinkers, and practitioners to drive ambitious and concrete climate action. He also focuses on climate thought leadership, strengthening internal capacities, strategic partnerships in the climate sector, enhancing collaboration across regions, and building a climate services platform for clients. Prior to joining Dalberg, Jagjeet served as the Assistant Director-General at the International Solar Alliance and as a Senior Policy Officer in the Global Climate Practice at the World Bank in Washington, D.C. Over the past 20 years of his career, his focus has been on green infrastructure, investment, and climate finance, working at the World Bank, the Asian Development Bank, the Green Climate Fund, the United Nations Climate Change Secretariat, Ernst & Young, and TERI. He has facilitated global climate finance negotiations and supported the design process of international climate funds at the UN and multilateral development banks. Shri Jagjeet has a master’s degree in Sustainability Management from the Indian Institute of Forest Management and a BSc in Agricultural Economics from Punjab Agriculture University in India.

 

The true test of a nation is not how it thrives in calm conditions, but how steadfast it remains when storms hit. Alongside the rest of the world, India has endured a pandemic, navigated global economic shocks, and continues to face converging climate threats, including heatwaves, floods, cyclones, and droughts that occur simultaneously or in succession. This has now become the rhythm of a new era. In such times, competitiveness can no longer be measured solely by GDP or export figures. A country that grows rapidly but collapses after every climate crisis can no longer be deemed “competitive” in any meaningful sense. The new metric for inclusive growth and prosperity is resilience: the capacity to address climate risks, safeguard livelihoods, and maintain growth even amid cascading crises.

Measuring growth through competitiveness gained global attention in the late 20th century, as nations started to evaluate themselves not just by raw growth but by their capacity to innovate, attract investment, and boost exports. Michael Porter’s The Competitive Advantage of Nations (1990) formalised this idea, suggesting that national prosperity depends on the interaction of factor endowments, demand conditions, industrial ecosystems, and firm rivalry^[1].

Competitiveness has become the guiding principle of economic policy in an era driven by globalisation, trade liberalisation, and rapid technological innovation. Today, the forces of trade and technology have only become more transformative in their effects. Artificial intelligence, digital platforms, and evolving global supply chains are reshaping the landscape of competitiveness as profoundly as container shipping or the internet once did. Countries are now judged not only by their production efficiency but also by how quickly they can adapt to disruptive changes.

In India, the 1991 reforms marked a decisive shift away from inward-looking policies and toward global integration. At that time, competitiveness became linked with liberalisation, efficiency, and market dynamism. The consistent rise in GDP growth rates, the surge in IT and services exports, and the significant expansion of the middle class were seen as signs of competitive growth. However, as time went on, the world changed, and history also shows us that the standard of progress can never stay the same.

The evidence is now more apparent than ever. According to the World Bank’s People in a Changing Climate (2023), labour productivity losses from heat stress already average 5.7 per cent in lower-middle-income countries: a category that includes India and is projected to rise further as global temperatures increase^[2].

By 2030, heat stress alone could cost India the equivalent of 34 million full-time jobs or nearly USD 450 billion in lost economic output, according to estimates by the International Labour Organisation^[3]. This is not an abstract risk, but a lived reality for construction workers, agricultural labourers, and millions in the informal sector, whose productivity underpins India’s competitiveness.

Agriculture, still the livelihood foundation for over 40 per cent of the Indian workforce, faces severe vulnerability. The CCDR notes that climate variability could reduce farm incomes in unirrigated areas by up to 25 per cent. Recurring floods in Assam, the droughts of Bundelkhand, and the 2019 Chennai water crisis are not isolated incidents, but they demonstrate how climate extremes are transforming India’s economic landscape. For example, Cyclone Amphan in 2020 caused damages of USD 13 billion, overwhelming state budgets and revealing the fragility of infrastructure systems. In 2023, flash floods in Himachal Pradesh led to losses exceeding USD 1.5 billion, while record-breaking heatwaves disrupted sowing cycles across India’s food belt. The fiscal costs are equally alarming. Between 2010 and 2020, India lost USD 87 billion annually to climate-related disasters, equivalent to nearly 3 per cent of its GDP (World Bank, 2023). These shocks repeatedly force governments to divert resources from development spending to relief and recovery, locking public finance into a cycle of reaction rather than preparation.

Competitiveness is therefore not just about the speed of growth but also about the durability and inclusivity of economic progress. This redefinition emphasises the importance of climate transition to India’s development path. It shifts the discussion from viewing climate policy as a cost to recognising that climate inaction is the real obstacle to competitiveness. A nation that invests in climate-smart agriculture, resilient infrastructure, and adaptable social protection is not engaging in “green spending”; it is safeguarding the very foundations of its economic strength. The good news is that advances in technology, from digital platforms to artificial intelligence, have created entirely new and more effective pathways for a climate transition—whether in clean energy deployment, precision agriculture, or adaptive infrastructure. The bad news is that the speed and scale of action still fall far short of the urgency of the crisis.

Before examining whether climate transition is an impediment or an enabler of competitiveness, it is crucial first to understand what such a transition in India entails: the risks it must address, the opportunities it creates, and the structural shifts it necessitates. To explore these questions, the following sections first analyse the current state of India’s competitiveness. It then outlines the contours of India’s climate transition, including the commitments, policy instruments, and structural changes involved. Ultimately, it examines whether and under what circumstances the climate transition can serve as an enabler of competitiveness rather than an obstacle.

The Competitiveness Landscape in India Today

India’s growing economic stature is now attracting global attention. With estimates showing it as the world’s fifth-largest economy in nominal GDP and third in purchasing power parity, India’s rise appears robust, with an annual GDP growth rate of 6.5% in 2024.^[4] While these headline figures indicate scale, they often mask more fundamental questions: What does this growth imply for productivity? How inclusive and widespread is this economic expansion? India’s global rankings across economic indices in 2024 depict a picture of rising stature but uneven foundations. The country is home to one of the fastest-growing populations of millionaires and billionaires, and four of its cities are now among the fastest-developing globally. However, this outward economic momentum contrasts with weaker performance on competitiveness, innovation, and talent development. These gaps suggest that while India advances in headline metrics, the core enablers of productivity remain underdeveloped. This is especially apparent when considering GDP per person employed, a key measure of how efficiently an economy converts labour into output. In this regard, India continues to lag considerably behind both global and middle-income counterparts.

As of 2024, India’s GDP per employed person was about $24,468, a slight rise from $23,700 in 2023. This figure remains well below the average for middle-income countries, which stood at $34,243, and is significantly less than China, which has exceeded $45,494—almost double India’s level. Even within the lower-middle income group, India is only marginally above the group average of $22,178, highlighting the structural challenges in turning labour input into economic output^[5].

This productivity gap is not just a sign of slower growth but indicates deeper economic inefficiencies. In 2024, India’s GDP per capita (PPP, constant 2021 international $), which reflects living standards and economic productivity, was $9,817, showing steady growth since 2015 but still trailing behind other emerging economies: China at $23,846 (2.4 times higher), the global average at $21,268, and the middle-income group at $14,902. India is only slightly above the lower-middle-income average of $8,789, highlighting limited progress in catching up. While Brazil ($19,648) and Indonesia ($14,470) maintain stronger positions, South Africa has stagnated but remains ahead of India^[6].

The broader trend indicates India growing faster than the global average, but from a very low base, narrowing gaps significantly and highlighting ongoing productivity and structural challenges. This issue is further emphasised by its low employment-to-population ratio. In 2024, India’s employment-to-population ratio was just 53.2 per cent, notably lower than China’s 62.4 per cent and the average for middle-income countries of nearly 58 per cent^[7].

This divergence between size and prosperity highlights the deeper challenge we face: growth alone does not equal competitiveness, and GDP does not automatically lead to shared prosperity. Competitiveness is crucial today because the rules of the global economy are being rewritten. We live in an era of structural change: supply chains are being shortened, reshored, and reconfigured for geopolitical resilience; technology is advancing, with AI being called the new electricity; climate change and multiple crises, from pandemics to conflicts, are reshaping risks. In this turbulence, traditional levers of cost and scale, which emerging economies like India have long relied upon, are no longer enough. What global markets now value are productive ecosystems, policy coherence, and predictability. Being cheap is not sufficient; what matters is how well systems function together. That is what distinguishes countries that merely grow from those that prosper.

India, in many ways, is uniquely positioned in this flux. It is the only economy with the potential to offer an alternative to China in manufacturing, the scale to become a vast consumer democracy, and the digital infrastructure to serve as a laboratory for the future. However, potential is not performance. As Michael Porter’s framework reminds us, real competitive advantage is engineered: it is built on factor conditions like skills and infrastructure, on sophisticated demand that pressures firms to upgrade, on clusters that integrate suppliers and innovators, and on institutions that enable healthy rivalry.

Even as India grapples with the fundamentals of competitiveness — skills, clusters, demand, institutions, etc. — a bigger question looms: how will all this unfold in the context of the climate transition? Competitiveness today cannot be separated from decarbonisation. The global economy is no longer indifferent to carbon; trade regimes, investment flows, and consumer preferences are increasingly influenced by climate considerations. Europe’s Carbon Border Adjustment Mechanism, the surge of green subsidies in the United States, and the race for critical minerals all demonstrate how climate imperatives are becoming part of the very structure of competition.

For India, therefore, the climate transition is not an external constraint layered onto its growth story. It is part of the playing field on which competitiveness itself will be decided. The challenge of building clusters is also the challenge of building clean-energy ecosystems that can deliver reliable power without locking in existing infrastructure. The push for sophisticated domestic demand is also about whether rising households can afford and demand efficient appliances, electric vehicles, and renewable rooftop systems. The search for advanced factors is equally the search for climate-ready/green skills: engineers for green hydrogen, technicians for battery storage, regulators for carbon markets. Even India’s diplomatic posture, so crucial for securing capital and technology, is now shaped by climate alliances and green finance norms.

Viewed this way, the climate transition is not a separate goal from competitiveness but a fundamental current running through it. It will determine whether India’s manufacturing resurgence can integrate into future value chains or be left behind in carbon-intensive industries; whether its cities can attract investment or become overwhelmed by heat and pollution; whether its fiscal health can be maintained through green finance or strained by reliance on fossil fuels. In essence, climate is not just another item on the reform checklist; it is the foundation on which India’s competitiveness will be built.

This is not only because trade and technology are becoming climate-dependent, but also because climate change itself has deep economic and productivity consequences. It is no longer just an environmental issue; it is a fundamental economic risk that affects growth, welfare, and competitiveness. Research worldwide highlights two main ways climate change harms economic performance: the slow but constant effects of rising temperatures and changing rainfall, and the recurring shocks of extreme events such as floods, cyclones, and heatwaves. Both reduce productivity by lowering agricultural yields, decreasing labour output, damaging infrastructure, and straining health systems. For India, these risks are amplified by structural vulnerabilities. With 43% of the workforce still employed in agriculture and much of industry dependent on outdoor labour, productivity losses due to heat and rainfall variability are already considerable.

The ILO estimates that by 2030, South Asia could lose over 5% of working hours due to heat stress alone, which could result in millions of jobs disappearing in India’s most labour-intensive sectors^[8]. Extreme events are also intensifying cyclones along the eastern coast, causing recurrent flooding in the Gangetic plains and water shortages in central India. These issues disrupt output, damage infrastructure, and lead to significant costs for relief and reconstruction. Different states and districts face varying levels of exposure. Bihar and Odisha, for example, frequently experience floods and cyclone impacts, while Rajasthan and Maharashtra deal with heatwaves and drought. This uneven vulnerability results in regional differences in productivity setbacks, highlighting India’s already stark disparities in growth.

The message is clear: without climate resilience, competitiveness cannot be sustained. Productivity losses caused by rising temperatures and repeated shocks threaten to eliminate the very gains India aims for in manufacturing growth, labour participation, and infrastructure development. Essentially, the route to competitiveness must also include climate adaptation and mitigation efforts, such as safeguarding workers from heat stress, constructing resilient infrastructure, investing in early warning systems, and incorporating climate risk into fiscal and industrial strategies.

Therefore, if unmanaged climate risks undermine productivity and increase vulnerability, a carefully planned climate transition can significantly boost India’s competitiveness. By speeding up renewable energy and storage, India can reduce input costs and improve energy security; through investing in green industries like batteries, hydrogen, and circular economy models, it can access new export markets; and by building resilience in agriculture, cities, and infrastructure, it can protect productivity and mitigate fiscal shocks. In this way, the climate transition is not just about achieving emission targets but also about creating the advanced factors, resilient clusters, and policy consistency that Porter recognised as the hallmarks of competitive economies.

At the same time, while the transition provides an enabling platform, its true potential will only be realised if it is effectively directed and integrated with India’s broader development goals of jobs, equity, fiscal stability, and inclusive growth. The next section explores this issue: how the climate transition, if strategically implemented, can act not as an obstacle but as a catalyst for India’s long-term competitiveness.

Harnessing the Climate Transition for Competitiveness

Competitiveness is not about being the cheapest, but about creating conditions where firms and regions can continually improve through skills, innovation, and efficient ecosystems. Viewed this way, the climate transition is not an external imposition but a driver for such improvement. Moving to clean energy, for example, is not just about reducing emissions; it is about lowering the volatility of imported fuel costs, enhancing reliability for industries, and encouraging domestic manufacturing in renewables and storage. Each of these outcomes helps build advanced factor conditions such as reliable infrastructure, energy security, and a skilled labour force that support competitiveness much more profoundly than short-term cost advantages.

Global markets now require low-carbon, circular products, with mechanisms such as the EU’s Carbon Border Adjustment making climate standards essential for market entry. For Indian exporters, this is a matter of survival but also an opportunity: the pressure to reduce carbon emissions can encourage improvements in processes, supply chains, and product quality. Domestic demand is shifting similarly, from solar to clean mobility, aligning internal and external incentives. Climate action, therefore, is not separate from competitiveness; rather, it forms its foundation by fostering resilience, productivity, and innovation.

One of the clearest pathways is through the circular economy. India is at a point where material demand will triple by 2040, much of it in construction, mobility, and consumer goods. A linear “take, make, waste” model would entrench dependence on imports, increase resource volatility, and lead to waste management crises. Circular models, where materials are reused, products are designed for durability, and waste is considered a feedstock, offer a competitive alternative. They lower costs by reducing material and energy use and create new markets for repair, refurbishment, and recycling. This approach is not only environmental but also industrial. It enhances domestic secondary-materials supply, decreases reliance on geopolitical shocks regarding critical minerals, and fosters employment-heavy clusters in recycling, reverse logistics, and remanufacturing. For companies, circular practices open access to export markets where recycled content and traceability are increasingly mandatory. For consumers, they mean products that last longer and have lower lifecycle costs. In essence, circularity turns ecological limitations into an opportunity for competitiveness.

Climate shocks already strain India’s public finances through disaster recovery, energy subsidies, and costly fossil fuel imports, crowding out investment in skills and infrastructure. Transitioning to renewables can reverse this trend: solar and wind are now the cheapest power sources, and scaling them while reducing fossil fuel subsidies would stabilise budgets, lower input costs, and free resources for research, skills, and logistics. Green bonds and blended finance can further mobilise private capital without overburdening the state. For heavy industries, decarbonisation is crucial to stay within global value chains. Climate-resilient infrastructure and early-warning systems serve as productivity insurance, protecting workers, reducing downtime, and maintaining the foundations of competitiveness.

The employment dimension completes the main argument. For a country where millions of young people enter the labour market each year, the climate transition can generate jobs if directed properly. Clean energy, repair and refurbishment sectors, recycling, and sustainable agriculture are all more labour-intensive than the extractive, linear models they replace. Incorporating India’s extensive informal workforce into these emerging sectors can provide decent, productive work while improving skills across the board. Recognition of prior learning, micro-certification, and easier access to credit can help informal workers join formal circular and clean-tech economies. This not only increases the pool of skilled workers but also promotes competitiveness through inclusion, ensuring growth is wide-reaching and socially sustainable.

The international dimension amplifies these effects. In a world where trade, investment, and technology flows are increasingly influenced by climate issues, India’s diplomatic stance can shape the external environment in ways that enhance domestic competitiveness. By championing initiatives like the International Solar Alliance, the Coalition for Disaster Resilient Infrastructure, and the LiFE agenda, India projects its developmental vision onto the global stage. This is not merely soft power; it is a form of economic strategy. By influencing norms around finance, technology, and lifestyle, India safeguards policy space domestically while creating opportunities internationally. Climate diplomacy thus becomes a tool for competitiveness: it ensures access to technology and markets, shields against restrictive standards, and establishes India as a key player in shaping the low-carbon order.

None of this will happen automatically. The risk is that the climate transition stays fragmented with pilot projects that never expand, industrial policies that generate rents instead of fostering rivalry, and disparities at the state level that increase rather than decrease. Competitiveness demands coherence. It requires aligning industrial policy with trade strategy, fiscal tools with innovation incentives, and climate goals with development objectives. It also requires institutionalising predictability, so investors can trust that current standards and tariffs will not be arbitrarily changed tomorrow. Most importantly, it involves treating climate not as an addition to the growth narrative but as the core logic shaping competitiveness itself.

When viewed this way, the climate transition ceases to be a trade-off. It becomes the means by which India can reconcile growth, resilience, and global integration. Circular models transform waste into resources and costs into competitiveness. Renewable energy reduces input costs and stabilises fiscal space. Climate resilience shields productivity against shocks. Green jobs and inclusive skills secure prosperity within social stability. Diplomacy turns India’s domestic pathway into global influence. Each of these elements enhances the fundamentals of competitiveness, such as better factors, increased demand, denser clusters, and sharper rivalry. Together, they can convert India’s favourable position into a sustained competitive advantage.

The climate transition, then, is not just compatible with competitiveness; it is essential for it. However, its potential will only be realised if it is guided with purpose and coherence, aligned with broader development goals, and integrated into industrial, fiscal, and social policies. Done effectively, it can transform India into not just a large economy but a competitive one that is productive, resilient, and prosperous on its own terms.

Author Brief Bio: Professor Amit Kapoor is the Chair, Institute for Competitiveness & Meenakshi Ajith is the Development Policy Lead, Institute for Competitiveness.

References:

Adil, L., Eckstein, D., Künzel, V., & Schäfer, L. (2025, February 12). Climate Risk Index 2025: Who suffers most from extreme weather events? Germanwatch e.V. https://www.germanwatch.org/sites/default/files/2025-02/Climate%20Risk%20Index%202025.pdf

Arruda, L. R., Lima, D. A., & de Barros, R. T. (2021). Circular economy: A brief literature review (2015–2020). Cleaner and Responsible Consumption, 3, 100016. https://doi.org/10.1016/j.clrc.2021.100016

Asian Development Bank. (2022, November 3). Ensuring just transition is key to India’s energy transition goals. Asian Development Bank. https://www.adb.org/news/features/ensuring-just-transition-key-india-energy-transition-goals

Bruegel. (n.d.). The circular single market and sustainable competitiveness. https://www.bruegel.org/first-glance/circular-single-market-sustainable-competitiveness

Institute for Competitiveness. (2025). Skills for the future: Transforming India’s workforce landscape. Institute for Competitiveness. https://www.competitiveness.in/wp-content/uploads/2025/06/Report_Skill_Roadmap_Final_Compressed.pdf

Institute for Competitiveness; Economic Advisory Council to the Prime Minister (EAC-PM); Porter, M. E.; & Ketels, C. H. M. (2022, August). Competitiveness Roadmap for India@100 [Report]. Institute for Competitiveness. https://www.competitiveness.in/wp-content/uploads/2022/08/Report_Competitiveness_Roadmap-25_August_2022_Web_Version.pdf

Institute for Sustainable Development and International Relations (IDDRI). (2023). Aligning decarbonization, circularity and competitiveness: Europe’s role. https://www.iddri.org/en/publications-and-events/blog-post/aligning-decarbonization-circularity-and-competitiveness-europes

Kant, A., & Kapoor, A. (2023). The elephant moves: India’s new place in the world. Penguin Business.

NITI Aayog. (2025). India voluntary national review 2025: Progress towards the Sustainable Development Goals. Government of India. https://niti.gov.in/sites/default/files/2025-08/india-voluntary-national-review.pdf

Porter, M. E. (2008). On competition (Updated and expanded ed.). Harvard Business School Publishing.

Tamellini, L. (2025, February 25). A clean industrial revolution in Europe. Carbon Market Watch. https://carbonmarketwatch.org/publications/a-clean-industrial-revolution-in-europe/

Footnotes:

^[1] Porter, M. E. (1990). The competitive advantage of nations. Harvard Business Review, 68(2), 73–93.

^[2] World Bank Group. (2024). People in a changing climate: From vulnerability to action – Insights from World Bank Group country climate and development reports covering 72 economies. World Bank. https://hdl.handle.net/10986/42395

^[3] International Labour Organization. (2020). Working on a warmer planet: The impact of heat stress on labour productivity and decent work. ILO. https://www.ilo.org/wcmsp5/groups/public/—/—/wcms_711919.pdf

^[4] World Bank- https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=IN

^[5] World Development Indicators- World Bank:  https://data.worldbank.org/indicator/SL.GDP.PCAP.EM.KD

^[6] World Bank- https://databank.worldbank.org/reports.aspx?source=2&series=NY.GDP.PCAP.PP.KD&country=

^[7] World Development Indicators- World Bank: https://data.worldbank.org/indicator/SL.EMP.TOTL.SP.ZS

^[8] International Labour Organization. (2020). Working on a warmer planet: The impact of heat stress on labour productivity and decent work. ILO. https://www.ilo.org/wcmsp5/groups/public/—/—/wcms_711919.pdf

 

There was a time when development goals were pursued without considering environmental consequences. Examples are abundant. The construction of the Panama Canal between 1880 and 1914 brought significant economic, strategic, and technological benefits, revolutionising global trade by enabling shorter shipping routes and lower transportation costs. However, it also caused immense human suffering and long-term ecological damage to the isthmus. Similarly, rapid industrialisation and unchecked factory expansion during the Industrial Revolution in late 18th to 19th-century Europe and the U.S. led to urban air and water pollution, widespread deforestation, and health crises in many cities. Colonial plantation and mining projects across Africa, Asia, and Latin America, aimed at exploiting land for rubber, cotton, and minerals, resulted in extensive deforestation, soil exhaustion, social displacement, and cultural loss.

Recently, we have seen many man-made disasters resulting from a lack of foresight in addressing environmental issues. The deadly radiation leaks at Chernobyl Nuclear Power Plant in the former USSR in 1986 and the Bhopal gas tragedy in 1984, which killed thousands and continues to cause environmental and health problems, serve as clear examples. The Three Gorges Dam in China displaced over a million people and significantly altered river ecosystems. Similarly, the Aswan High Dam in Egypt in the 1960s reduced Nile fertility, led to declining fisheries, and prompted the relocation of Nubian communities.

Clearly, environmental issues must be integrated into economic and security considerations. The occurrence of ecological disasters, however, does not diminish the significance of security or development concerns. Instead, all three must be addressed together. The discussion can never be about choosing between development, security, or environmental preservation. It is not a zero-sum game in which one is prioritised at the expense of the others. All three are vital concerns.

In India, a controversy recently surfaced when Ms Sonia Gandhi, the matriarch of the country’s leading opposition party, published a sharp article criticising the Great Nicobar Island Development Project (GNIDP), also known as the “mega-project on Great Nicobar”.^[1] Calling the Rs 72,000 crore initiative a “planned misadventure,” she writes that the project threatens the existence of the island’s indigenous tribal communities, endangers one of the world’s most unique flora and fauna ecosystems, is highly susceptible to natural disasters, and has been hastily approved without adequate legal and social safeguards. While subtly recognising the project’s strategic and economic value, she asserts that the disaster risk far exceeds the potential benefits.

This form of extreme positioning is equally disruptive. We have seen instances where environmental issues have been weaponised to stall development projects. The Narmada Bachao Andolan (NBA) is a prime example. The movement emerged in opposition to the construction of dams on the Narmada River, particularly the Sardar Sarovar Dam in Gujarat. The dam was finally inaugurated in 2017, after decades of dispute that began in 1985. While genuine social and environmental concerns may have initially driven the NBA, it soon deteriorated into ideological opposition to large-scale projects. It was influenced by foreign actors, especially Western NGOs and advocacy groups, which funded the protests to advance their own interests. Emotional imagery from the NBA highlighted the negatives, showing submerged villages and the poor on hunger strikes. They received celebrity endorsements, but the movement was city-led, with the emotional narrative overpowering factual assessment.

A fact-check of the Sardar Sarovar Project, comparing the NBA’s claims to the actual outcomes, is enlightening. The NBA claimed that over 3 lakh families would be permanently displaced; however, fewer than 2 lakh people were affected, and nearly all received land-for-land compensation. Many displaced communities gained access to schools, electricity, and healthcare for the first time. The NBA also exaggerated the environmental impact, claiming massive deforestation and ecological collapse, but no such large-scale loss of biodiversity was recorded after stabilisation. On the benefits side, the project resulted in over 18 lakh hectares of land irrigated, piped water reaching millions of homes, and a surge in power generation capacity. An independent cost-benefit analysis by IIM Ahmedabad in 2018 found a benefit-to-cost ratio of over 2.5:1 over 30 years, indicating a significant net public gain.^[2] Surveys by the Centre for Social Studies (CSS), Surat (2016) found improvements in income, education, and access to services for most resettled households compared to pre-submergence levels. All this indicates broad positive social outcomes, though, of course, some localised grievances remain.

This is not to imply that environmental concerns are unimportant. They are vitally important, and including them in the development agenda is part of the process. Ignoring environmental issues harms society, but so does a lack of development and neglect of security issues. A comprehensive approach must include all three. That is why Ms Sonia Gandhi’s article is problematic. Its focus is singular, dealing only with the threat to the environment. The mitigation strategies that form part of the project have not been mentioned. The economic and strategic payoffs that the project brings to the nation have also not been highlighted.

When environmental concerns outweigh security and development priorities, we risk undermining national interests, thereby favouring hostile external powers. A notable example is Vedanta’s Sterlite copper smelter in Thoothukudi, Tamil Nadu, which in 2018 was forced to shut down by activists organising protests over alleged severe environmental pollution. Consequently, India, which had previously been a net exporter of refined copper, became a net importer. In 2023, the Tamil Nadu governor, Mr RN Ravi, claimed that the anti-Sterlite protests in 2018 had been funded by foreign interests and aimed at hindering progress.^[3] Regardless of whether the Governor’s claim is valid, the fact remains that the shutdown was not in the country’s best interests. Environmental concerns should have been adequately addressed; the shutdown was unwarranted.

Earlier, in Tamil Nadu, organised protests by NGO’s against the Kudankulam Nuclear Power Plant (KKNPP) in Tirunelveli district took place between 2011 and 2013. The protesters heightened fears about the potential for a nuclear disaster and radioactive contamination of the sea, despite the Indian government and Atomic Energy Commission asserting that the plant was safe, modern, and vital for India’s energy security. In an interview given to Science Magazine in 2012, the then Prime Minister, Dr Manmohan Singh, stated that, “The atomic energy programme has got into difficulties because these NGOs, mostly based in the United States and Scandinavian countries, don’t appreciate the need for our country to increase the energy supply.”^[4] He suggested that some NGO’s received foreign funds to fuel opposition to the plant. This charge would not have been made lightly. It had much to do with geopolitical and commercial rivalries between Russia and Western countries. The KKNPP was built under an India–Russia intergovernmental agreement in 1988 and 1998. Moscow also offered to build up to six reactors at Kudankulam. After the U.S.–India Civil Nuclear Agreement of 2008, Western companies seeking major reactor contracts in India were believed to be behind these protests to undermine Russia’s first-mover advantage. While all this is speculative, there is enough evidence to suggest that environmental issues can be weaponised to impede a country’s growth.

Environmental concerns were also used to slow down infrastructure development in Eastern Ladakh and in Arunachal Pradesh. This worked to China’s advantage, which had developed its communication infrastructure right up to the LAC. Thankfully, over the past decade, a lot of effort has gone into addressing the shortcomings of earlier years, as a result of which India is today better prepared to take on any hostile military action by China.

Let us now examine what the GNIDP project involves and why it is vital for India. The Andaman & Nicobar Islands have immense strategic value because of their location near the Six Degree Channel and the Malacca Strait, which is perhaps the world’s busiest shipping lane connecting the Indian and Pacific Oceans. While Indian policymakers recognised the strategic importance of the A&N Islands, it was only in the early 1980s that the Indian Navy began modest infrastructure development at Port Blair. Later, in 2001, India established its first tri-service command—the Andaman & Nicobar Command (ANC) —thus signalling its strategic intent. But further development remained limited and piecemeal, primarily due to environmental concerns. There was also an element of strategic caution. India, in line with its policy of “strategic restraint”, kept a low profile, using the Islands for surveillance and not for forward deployment. In addition, limited funding, lack of political backing and a single unified authority over the A&N Islands slowed decision-making. Consequently, a larger strategic vision encompassing an economic and defensive charter for the Island chain, in line with its strategic potential, did not materialise.

With the change in government in 2014, India’s maritime and strategic thinking also shifted. China’s growing presence in the Indian Ocean is a source of concern, and the Andaman and Nicobar Islands are key to countering Chinese designs. This also aligns with India’s Act East Policy, its strategic cooperation with the Quad and ASEAN, and the economic rationale for making a transhipment terminal to rival Singapore and Colombo. The Great Nicobar Mega Infrastructure Project, conceived by NITI Aayog and implemented through the Andaman and Nicobar Islands Integrated Development Corporation (ANIIDCO), marks the first comprehensive attempt to combine national security objectives with regional economic development in the Bay of Bengal by making the islands into a strategic economic hub.

The development spans approximately 166 km² over the next 30 years. The main elements of the project include constructing an International Container Transhipment Terminal (ICTT) at Galathea Bay on the eastern side of Great Nicobar, with a capacity of 16 million TEU once completed. The initial phase will handle 4 million TEU. Its location near the Six Degree Channel and the Malacca Strait, along key shipping routes, provides India with a strategic maritime transhipment hub. There will also be a dual-use Greenfield International Airport capable of handling both civil and military traffic, with a capacity of 4,000 passengers per hour during peak times by 2050. Additionally, a power plant and supporting infrastructure will be developed. Two new greenfield cities — one at Campbell Bay and another at Galathea Bay — are included in the project, which will also feature a cruise ship terminal, luxury tourism resorts, and an industrial hub.

The concerns raised by Ms Sonia Gandhi in her article are well known. The Galathea Bay development area covers 18 per cent of the entire region of Great Nicobar Island (GNI). The tropical evergreen rainforests are part of UNESCO’s Great Nicobar Biosphere Reserve. Development of the area will impact coastal morphology, coral ecosystems, and the tribals. However, all these issues have been considered, and mitigation strategies are in place. An environmental mitigation framework exists, including regulatory oversight and phased approvals, scientific assessment and redesign, and offset and compensatory measures. The development project is not denying environmental risks. Instead, it addresses these challenges through adaptive, evidence-based governance that balances strategic needs with ecological responsibility.

The national focus should therefore be on completing the project on time while implementing responsible ecological measures. The project is transformative. By integrating its economic and strategic potential with environmental considerations, India can strengthen its presence in the Indian Ocean region and ensure that the oceans remain free, open, and inclusive for all. The approach used for the Great Nicobar Island Development Project (GNIDP) can serve as a model, demonstrating how security, economic growth, and environmental protection are crucial elements of development and can be combined to pursue national progress.

Author Brief Bio: Maj. Gen Dhruv C. Katoch is Editor, India Foundation Journal and Director, India Foundation.

References:

^[1] Gandhi, Sonia. “The Making of an Ecological Disaster in the Nicobar.” The Hindu, 10 Sept. 2025, www.thehindu.com/opinion/lead/the-making-of-an-ecological-disaster-in-the-nicobar/article70022939.ece.

^[2] https://vslir.iima.ac.in:8443/xmlui/handle/11718/6922

^[3] PTI, “2018 Sterlite Protests Were Fuelled by Foreign Funds, Says TN Governor.” ThePrint, 6 Apr. 2023, theprint.in/india/2018-sterlite-protests-were-fuelled-by-foreign-funds-says-tn-governor/1502650.

^[4] BBC News. “India PM Manmohan Singh Blames Anti-nuclear Protests on US NGOs.” BBC News, 24 Feb. 2012, www.bbc.com/news/world-asia-india-17150953.