India Unveils Draft Climate Finance Taxonomy to Support Net Zero Transition

May 8, 2025 - 11:24

India’s Ministry of Finance has introduced a draft framework for its Climate Finance Taxonomy, a systematic classification designed to identify sustainable economic activities that align with the nation’s climate objectives. This initiative aims to channel significant capital flows necessary for the country’s transition to net zero emissions, while simultaneously addressing the risk of greenwashing.

The taxonomy is a vital step in defining what constitutes environmentally sustainable activities, providing clarity to investors and businesses alike. By establishing clear criteria, the framework seeks to enhance transparency in climate finance, ensuring that investments genuinely contribute to environmental sustainability.

India’s commitment to its climate goals is evident as it strives to balance economic growth with environmental responsibility. The draft taxonomy is expected to play a key role in mobilizing resources from both domestic and international investors, facilitating the necessary investments in clean energy and sustainable infrastructure. This initiative reflects India’s proactive approach to combating climate change and fulfilling its global commitments.