Green Financing In India: Promoting Sustainable Development Through Financial Innovation

Uday Sehgal, University of Law (London)

ABSTRACT

Green finance is gaining increasing prominence as a top priority in public policy. Its fundamental role lies in connecting economic growth, environmental progress, and the financial sector with each other. This article explores the concept of green financing in India and its role in promoting sustainable development through financial innovation. As India faces significant environmental challenges due to climate change and population growth, it has set ambitious targets for renewable energy capacity. To achieve this, the country requires substantial investment in green infrastructure, which can be facilitated through green financing. The Article is divided into multiple sections. Firstly, it identifies the framework of green financing in India. The second section highlights key initiatives and incentives taken by the Indian government and financial institutions to foster green finance such as green bonds, green banks, ESG framework, and how they align with projects aimed at mitigating climate change. Further, section three talks about the various challenges for the Indian economy such as high borrowing costs, limited awareness, and greenwashing practices. It emphasizes the importance of transparency, standardization, and education in promoting sustainable investment practices and attracting more funds into green projects. Section four highlights the trends and key players related to green acquisition in India. The last section provides concluding remarks as to what lies ahead for the economy of India to further its green investments. It involves introducing incentives for green bond investors, establishing a robust green taxonomy, and utilizing technology for emissions tracking and reporting. Overall, the article underscores the significance of green financing in India's journey towards a greener and more sustainable economy.