COP29: India’s climate finance landscape – present and future

COP29 brought together nearly 200 nations to tackle the climate crisis, with a focus on increasing climate funding for developing countries. The conference agreed to triple the annual amount for green technologies to USD300 billion by 2035 and bring in USD1.3 trillion annually through co-ordinated public and private investments.

India called the USD300 billion target inadequate, failing to meet the financial and technological needs of developing nations. This stemmed from historical inequities in emissions, with the Global North’s industrialisation responsible for 92% of excess carbon emissions. Despite facing severe climate degradation, developing countries have not secured sufficient financial support from wealthier nations. Calls for greater accountability have grown louder as developing nations demand fairer contributions from the North.

Despite global challenges, India has achieved a significant milestone in its renewable energy development, surpassing 200 gigawatts (GW) of total renewable energy capacity. This aligns with the country’s goal of achieving 500GW from non-fossil sources by 2030. Renewable energy-based electricity capacity reached 203.18GW in October 2024, up from 178.98GW in October 2023, a 13.5% increase of 24.2GW. Including nuclear energy, India’s total non-fossil fuel capacity rose to 211.36GW in 2024, compared to 186.46GW the previous year.

India faces financial challenges in achieving its climate goals, requiring an estimated USD2.5 trillion by 2030, approximately USD170 billion annually, to meet its Nationally Determined Contributions. Reports suggest the cost of reaching net-zero emissions by 2070 could be USD10.1 trillion, underscoring the scale of transformation for all sectors.

While domestic investments are rising, they are insufficient and global financial inflows lag. The private sector’s role, though growing, is constrained by high borrowing costs, uneven fund disbursement and limited risk-sharing mechanisms. Removing these barriers through policy reforms, inventive financing and substantial international climate finance commitments will be crucial to India meeting its ambitious targets and driving sustainable development.

India and other developing nations continue to emphasise the need for fair and accessible climate finance. Innovative tools such as green bonds, blended finance, and climate-focused investment funds have come to the fore. The focus is on affordability, high borrowing costs and robust mechanisms for distributing funds. This requires significant private sector involvement locally and globally.

The legal industry has a vital and evolving role in India’s renewable energy transition, with significant growth potential in an expanding sector. Lawyers are heavily involved in structuring and negotiating contracts, such as in power purchase, engineering, procurement and construction, and project finance. They ensure compliance with the regulatory requirements of such bodies as the Ministry of New and Renewable Energy and state electricity boards.

Greater investment in the renewable sector and cross-border transactions demand expertise in project finance, international law, foreign exchange, tax structuring and arbitration. Green bonds and innovative financing require securities law and ESG compliance skills. Lawyers shape policies and advise governments on renewable energy laws, tariffs and investment incentives.

With sustainability becoming a key business priority, companies increasingly seek legal guidance to align with renewable goals. The legal industry’s role in resolving disputes, particularly concerning project delays and contract enforcement, will continue to grow.

Progress after COP29 needs strengthened climate finance and allaying the concerns of developing nations. Developed countries have to fulfil their pledges and increase transparency, ensuring that funds are accessible and used effectively. Establishing accountability is crucial to rebuilding trust between the Global North and South, particularly when previous commitments have not been met. Promoting innovative financing tools such as green bonds and blended finance will attract private investment. Global collaboration is key to attracting the agreed USD1.3 trillion annually, allowing developing countries to achieve their climate goals and foster sustainable development.

Ashish Chandra and Saurabh Tiwari are partners and Anupal Dasgupta is a principal associate at DSK Legal. The authors would like to thank principal associate Anupal Dasgupta for his contribution.