Updating its climate goals, India has pledged that by 2035, 60% of its installed electric capacity will comprise of non-fossil sources. It also aims to reduce by 47% the intensity of emissions per unit of GDP from 2005 level and to increase its carbon sink to 3.5 billion tonnes – 4 billion tonnes. These targets make up its Nationally Determined Contribution (NDC), which are to be communicated to the United Nations Framework Convention on Climate Change (UNFCCC). 

“We will easily achieve these goals… (with) the speed with which we are expanding our non-fossil sources,” Union Information Technology Minister Ashwini Vaishnaw said at a briefing on Wednesday following a Cabinet meeting.

As a signatory to the Paris Agreement, India was required to issue an updated NDC in 2025, which spells out its voluntary actions towards transitioning away from fossil fuel and improving energy-efficiency measures.

At the 30th edition of the Conference of Parties in Belem, Brazil, in November last year, Environment Minister Bhupendra Yadav said that India would announce the NDC by the “year-end. The Conference of Parties, or CoP, is a body of nations that convenes annually to discuss climate issues and transition their economies away from fossil fuel.

India and Argentina were the only two G-20 countries that had not announced a 2035 NDC as of December 31, 2025. A total of 128 parties, representing about 78% of global greenhouse gas emissions, had submitted new NDCs by that date. These included 21 Small Island Developing States, 19 Least Developed Countries, and 18 G-20 members.

Current commitments

India’s current NDC, officially conveyed to the United Nations in August 2022, commits to the following by 2030: having 50% of its installed electric power from non-fossil sources; reducing the intensity of emissions per unit of GDP by 44%; and increasing its carbon sink to at least 2.5 billion tonnes to 3 billion tonnes of CO2 equivalent.

Currently, about 52% of India’s installed electric capacity comes from non-fossil fuel sources — a target achieved well before the deadline — though only about 25% of the power generated is non-fossil. These sources include solar, wind, hydropower, biomass, and nuclear power. As of 2019, say official estimates, India has achieved an emissions intensity of 36% from 2005-2020.

A carbon sink of 1.97 billion tonnes of CO2 equivalent had already been created from 2005 to 2019. However, forest and tree cover accounts for about 24.6% of India’s geographical area as of 2021, which is higher than the 21% in 2005, but still less than the national policy goal of 33%.

“In shaping India’s NDC for 2031-2035, the government has considered the outcomes of the first Global Stocktake (GST), principle of Common but differentiated responsibilities and Respective Capabilities (CBDR-RC), and equity with a view to harmonize national realities, developmental priorities, energy security and the need for greater ambition in climate action, in line with the purpose and long-term goals of the Paris Agreement,” the Environment Ministry said in a statement.

Initiated in 2021, the GST assesses the world’s collective progress towards limiting global warming to 1.5 degrees Celsius, concluding that nations are not on track. Several independent analysts have suggested that while India may meet its 2030 NDC targets, it isn’t enough to keep the globe on a 1.5C pathway.

Independent analysts said India was picking up the slack for developed countries.

India’s NDC target had come amid a “rollback of climate policies” and “unilateral trade measures” by developed, rich countries, Vaibhav Chaturvedi, senior fellow, Council for Energy, Environment and Water (CEEW), told The Hindu. “It demonstrates a strong resolve to address transmission and land availability constraints faced by the renewables sector. The 47% emissions intensity target shows that energy security and prices cannot be taken for granted.”

“At a time when developed countries are backtracking on ambition, deepening their fossil fuel entrenchment, and dragging the world towards military conflict, the signal from India shows that Global South (developing country) leadership on climate ambition is concrete and real,” Avantika Goswami, of the Centre for Science and Environment (CSE), an influential think tank, said in a statement.

Published – March 25, 2026 11:34 pm IST

In May this year, the Ministry of Finance released India’s draft Climate Finance Taxonomy for public consultation. As a foundational tool, the taxonomy aims to mobilise climate-aligned investments, prevent greenwashing, and clarify for investors which sectors, technologies and practices contribute to mitigation, adaptation, or transition. Importantly, the document calls itself a “living” framework, adaptable to India’s evolving priorities and international obligations. However, its success as a credible governance tool will depend on how it operationalises this principle.

The review architecture

Herein is a proposed review mechanism that is structured for the taxonomy, drawing from the recent regulatory innovations under the Paris Agreement’s Article 6.4 Mechanism. The Article 6.4 Supervisory Body has adopted a legal and editorial review system for climate market instruments. These principles offer a useful reference for India’s taxonomy to ensure investor confidence, legal clarity, and domestic-international alignment.

The review system for the climate finance taxonomy should function on two complementary levels. First, there must be a periodic review mechanism that allows for timely course correction.

These reviews should be annual and triggered by implementation gaps, evolving international obligations, stakeholder feedback, or policy changes. To be effective, they must follow a structured and predictable process, with fixed timelines, clear documentation protocols, and mandatory public consultation.

Alongside this, a recurring review should be institutionalised every five years. This deeper, more comprehensive, process would reassess the taxonomy in light of emerging trends in carbon markets, shifts in global climate finance definitions, and lessons learned from sectoral transitions. A five-year cycle corresponds with India’s updated Nationally Determined Contributions timeline and the global stocktake process under the United Nations Framework Convention on Climate Change. Together, these two levels of review would ensure that the taxonomy remains both responsive in the short term and resilient in the long term.

The substantive aspect of the review

Two key aspects must form the basis of any meaningful review: legal coherence and substantive content clarity. The legal assessment should examine the taxonomy’s alignment with India’s laws: Energy Conservation Act, SEBI norms, Carbon Credit Trading Scheme, and international obligations. The review should ensure enforceability, remove redundancies, clarify overlaps and harmonise terms. In addition, the review must identify interdependencies between climate finance mandates and other economic or fiscal measures such as green bonds, blended finance schemes, or environmental risk disclosures, so that revisional inconsistencies are avoided.

The substantive editorial review must ensure that the taxonomy remains readable, coherent and technically precise. Definitions must reflect evolving market standards and be usable by both experts and non-experts.

Where quantitative thresholds exist, for instance, greenhouse gas emissions reduction targets or energy efficiency benchmarks, these must be updated with empirical data and stakeholder input.

These reviews should ensure the taxonomy remains accessible for micro, small and medium enterprises, the informal sector, and vulnerable communities, crucial for net-zero goals, but which face barriers. It should provide simplified entry points, staggered compliance timelines, and proportionate expectations, especially in agriculture and small manufacturing.

Institutionalising accountability

To support such a review structure, the Ministry of Finance should establish a standing unit within the Department of Economic Affairs or an expert committee composed of stakeholders from financial regulators, climate science institutions, legal experts and civil society. Public dashboards can be developed to receive inputs, document implementation experiences and publish review reports. These measures will ensure the taxonomy evolves predictably and transparently

Annual review summaries and five-year revision proposals must be made available to the public, ideally in a consolidated format, to improve investor confidence and ease of access. This will also enable better coordination with parallel instruments such as India’s carbon market mechanisms, disclosure obligations and green bond frameworks.

The taxonomy’s rollout coincides with critical developments in India’s climate finance ecosystem. The Carbon Credit Trading Scheme is expected to be fully operationalised, green bonds are entering mainstream portfolios, including on the stock market, and the pressure to align public investment flows with long-term climate goals is rising. A weak or opaque taxonomy will undercut these efforts. A ‘living document’ is only as effective as the process that keeps it alive through active review, transparent revision, and structured engagement. It is hoped that such consideration will form a part of the final climate taxonomy framework.

Shashank Pandey is a lawyer and a former Research Fellow at the Vidhi Centre for Legal Policy

Published – August 20, 2025 12:08 am IST