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2 min readUpdated: Jan 30, 2026 08:06 AM IST
Lamenting the continued lack of international financial support for climate action in developing countries, India on Thursday said domestic financial resources were proving insufficient for its investment requirements for green transition.
The Economic Survey presented to Parliament on Thursday said global capital markets were flush with funds, but very little money was being directed for climate action. And even that was being predominantly invested in developed countries or China. Developing countries, excluding China, were getting just about 15 per cent of international climate finance, it said.
“The core challenge is not a shortage of global capitalbut a structural misalignment between abundant liquidity and risk appetite,” the Survey said.
“Currently, around 83 per cent of India’s finance for mitigation and 98 per cent of finance for adaptation is sourced domestically. However, the gaps in available finance and the needs persist, and relying solely on domestic resources will not be sufficient,” the Survey said, citing a recent study from Climate Policy Initiative, an international advisory group on climate finance and policy.
The Survey said the absence of adequate money was one of the biggest hurdles to enhanced climate action in the country. While several steps had been taken to mobilise domestic resources, and strengthen the domestic financial system, this would not be enough.
“Raising climate ambition in India, especially on mitigation, without corresponding support in finance and technology is neither realistic nor equitable,” it said.
“India’s experience highlights the importance of robust domestic financial markets, strong development banks, effective municipal finance, and credible regulatory frameworks. However, domestic resources alone cannot meet the required investment scale. Reforms to multilateral development banks, the greater use of risk-sharing and blended finance, recalibration of credit rating practices, and predictable concessional finance are essential to lowering the cost of capital and attracting private investment,” it said.
