Skip to Content Skip to Menu Skip to Footer

Highlights

India is committed to climate action and could strengthen its climate strategy by balancing emission reduction targets with economic growth.

The country continues to be vulnerable to the physical risks of climate change. In 2024, India has experienced weather extremes including heat waves, with temperatures soaring beyond 45 degrees C, and devastating monsoons.

Effective climate action will require enhanced adaptation efforts, for which climate finance is critical. 

India Forward

Emerging Perspectives

India, the third-largest energy consumer globally, is committed to climate action. Its per capita emissions of 2 metric tons are less than half the global average of 4.6 metric tons, according to the International Energy Agency. In 2015, the country submitted its first nationally determined contribution (NDC) goal of reducing the emissions intensity of its GDP 33%-35% by 2030 from 2005 levels. It surpassed this goal in 2019, reaching 33% 11 years ahead of schedule. As per India’s updated NDC, the country is aiming for a 45% reduction by 2030.

The country’s climate strategy must balance such reduction targets with economic growth and burgeoning energy demand to cope with more intense and frequent climate-related events. In addition to playing an important role in international dialogues, fostering partnerships and developing action plans that combine adaptation and mitigation, addressing key areas such as climate finance and participation from all levels could help shape India’s approach to climate change.

India’s influential role in climate negotiations

India is a key energy driver and a crucial partner in powering global climate efforts, and has emphasized the importance of being actively engaged in international dialogues. Climate policy took center stage at the G20 Leaders’ Summit 2023 in New Delhi, with declarations to “pursue low-[greenhouse gas]/low-carbon emissions, climate-resilient and environmentally sustainable development pathways by championing an integrated and inclusive approach.”

In international dialogues, India has continually highlighted climate justice. At COP27, the country called on developed and developing nations to respond while stressing the principle of “common but differentiated responsibilities and respective capabilities,” according to a government statement. India has spearheaded a campaign for the greater infusion of climate capital and technology transfer into developing nations. While the country has set its net-zero pledge for 2070, the UN NDC registry shows Southeast Asian nations such as Malaysia and Singapore aiming for 2050 — two decades earlier. India’s long-term low-carbon development strategy indicates the reason for India’s later net-zero target is rooted in its expanding economy and increasing energy requirements.

The country continues to find partners in South Asia through groupings such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the South Asian Association for Regional Cooperation (SAARC) to address climate change challenges, exchange strategic knowledge and promote capacity development. Its climate diplomacy also extends beyond South Asia through bilateral agreements with countries such as the UK, Japan, France and the US. As a founding member of the International Solar Alliance, India’s international climate clout has grown by promoting solar energy across the globe.

India’s climate vulnerability is growing

India continues to be highly vulnerable to the physical risks of climate change, experiencing an increase in the intensity and frequency of extreme weather events. According to World Meteorological Organization data, the country sustained over US$4.2 billion in damages due to flood-related disasters in 2022.

In Look Forward: India’s Moment, S&P Global Sustainable1 forecast that in New Delhi, temperatures will exceed 40 degrees C for 48 days annually by the 2050s.

In 2024, India has experienced huge climate-related losses: heat waves with temperatures climbing beyond 45 degrees C, intense monsoons leading to the Wayanad landslides, and cloudbursts and flash floods in the fragile Himalayan ecosystems affecting human lives, livestock, livelihoods and infrastructure.

Combining climate adaptation and mitigation for climate resilience

Integrating adaptation strategies with mitigation efforts could accelerate India’s climate response. In 2023, the country presented its initial adaptation strategy to the UN Framework Convention on Climate Change, outlining the challenges and its planned actions for climate adaptation. The communiqué indicated that total adaptation-relevant expenditure was 5.6% of GDP in 2021–22, growing from a share of 3.7% in 2015–16. It also estimated that US$680 billion, or 56.68 trillion Indian rupees, would be required until 2030 for adaptation without any additionality in a business-as-usual scenario, with 2023–24 as the reference year.

The lack of climate finance is the fundamental challenge deterring adaptation efforts, but this is not unique to India. The UN Environment Programme’s “Adaptation Gap Report 2023” estimated the adaptation finance gap for developing countries is US$194 billion to US$366 billion per year. Mitigation finance, including private investment, has dominated climate finance in Asia-Pacific, accounting for 91% of total flows, or US$472.5 billion. Adaptation finance accounted for only 8%, US$40.8 billion, mostly from public funding, according to a 2023 Asian Development Bank report.

Adaptation and mitigation have been central to climate finance, but recognition of loss and damage is growing as a third crucial element. At COP28, held in 2023 in the United Arab Emirates, India supported implementing the fund for responding to loss and damage. In India’s 2024–25 Union Budget, Finance Minister Nirmala Sitharaman unveiled plans for a climate finance taxonomy aimed at boosting funding for climate change adaptation and mitigation by attracting more international investment and fostering public-private collaboration.

Aside from finance, adaptation requires mapping vulnerability at a grassroots level. While mitigation strategies benefit from top-tier policies such as setting emissions reduction goals or increasing renewable energy, adaptation needs a bottom-up strategy with active participation from local stakeholders. It demands the efforts of multiple verticals, from village-level governance to state and central ministries. Climate adaptation strategies must be customized to specific local geographies and climatic contexts as there is no holistic solution. This need for customization, combined with diverse socioeconomic conditions, poses a barrier to the widespread application of adaptation measures.

The development of climate-resilient infrastructure is crucial to counter the physical risks of climate change. In 2019, Prime Minister Narendra Modi launched the Coalition for Disaster Reduction Infrastructure, a climate adaptation initiative, to promote infrastructure resilience to climate and disaster-related risks. Recurring destruction from floods and storms necessitates upgrades to rural and urban infrastructure, the development of robust emergency response plans and disaster response preparedness.

Conclusion

To create a more robust transition strategy, India could consider undertaking measures to increase climate finance flows, incentivize private sector investment toward adaptation, build scalable resilient solutions, empower municipal and local authorities in climate emergency response, build climate-resilient infrastructure and encourage the implementation of local adaptation measures.

Capacity development at the individual and government levels could help improve disaster preparedness and emergency response. India’s approach to climate adaptation and mitigation can help the country strengthen its resilience to climate impacts, protect against financial losses, achieve its climate commitments goals, and prevent deaths and injuries from climate-related events.

India Forward: Emerging Perspectives

Making agriculture more efficient for food security and sustainable growth

This article was authored by a cross-section of representatives from S&P Global and in certain circumstances external guest authors. The views expressed are those of the authors and do not necessarily reflect the views or positions of any entities they represent and are not necessarily reflected in the products and services those entities offer. This research is a publication of S&P Global and does not comment on current or future credit ratings or credit rating methodologies.

Download this report