India rises as a key destination, buoyed by strategic investments, policy push, and tech maturity, but challenges in deep-tech scaling and domestic capital persist. 

India is emerging as a major hub for climate capital, attracting over USD 2 billion in clean technology investments in the past year alone, according to Bloomberg New Energy Finance (BNEF). Backed by rising demand, a maturing clean tech ecosystem, and strong policy support, the country is now seen as a pivotal market for the global transition to a low carbon economy.

What’s Going Right

According to BNEF, global climate investors such as TPG Rise Climate, Breakthrough Energy Ventures, LeapFrog Investments, Lowercarbon Capital, and Fullerton Fund Management have moved beyond early-stage pilot funding to make platform-level, growth-stage investments in India’s clean energy space.

Clean energy is increasingly being used in logistics, cold-chain systems, and distributed power networks, making it integral to essential services. This trend reflects a shift from discretionary adoption to mainstream infrastructure integration, enhancing investor confidence.

India’s Production Linked Incentive (PLI) schemes for advanced chemistry cell (ACC) battery storage, solar module manufacturing, and electric mobility have made the country’s clean tech manufacturing cost-competitive.


Unlike previous cycles driven by hype, recent investments focus on startups with viable unit economics, patented technologies, and scalable business models. A notable example is the USD 60 million investment by the European Investment Bank (EIB), in collaboration with the International Finance Corporation (IFC) and Testorage platform.

Fullerton Fund Management invested in AI powered transport optimization firm Routematic, under its Fullerton Carbon Action Fund, underscoring investor interest in clean transport solutions.

What Needs More Work

India has several clean tech research hubs (e.g., IIT Madras, C-CAMP Bengaluru) but suffers from a lack of commercialisation pathways and early-stage risk capital. Bridging this “valley of death” between innovation and market-ready products remains a policy blind spot.


Despite the global inflow, domestic institutional capital remains limited. India’s climate VC space still depends heavily on foreign funds. According to a Climate Policy Initiative (CPI) report, less than 10 per cent of clean energy equity financing in India in 2023 came from domestic sources.


Sectors like steel, cement, fertilizer, and aviation account for over 30 per cent of India’s industrial emissions but have received less than 5 per cent of clean tech funding, according to data from the Council on Energy, Environment and Water (CEEW).

India currently lacks a national carbon pricing or emissions trading system (ETS). This absence limits long-term investor visibility. Although pilot ETS schemes are underway in Gujarat and Maharashtra, a nationwide framework is yet to be implemented.