India has recently emerged as a more attractive destination for clean technology funding compared to China, driven by a strong push for domestic green manufacturing. In the third quarter, India secured deals worth approximately $2.4 billion, significantly outpacing China and ranking second globally after the United States, according to BloombergNEF data.
This surge in investment is fueled by India’s efforts to expand local clean energy capacity and reduce reliance on China. Raj Pai, founding partner of GEF Capital Partners, highlighted the high attractiveness of the climate sector for both public and private capital.
Prime Minister Narendra Modi’s government has launched several policy initiatives to boost the clean energy sector. The International Energy Agency predicts that India will experience the fastest expansion of renewables among major economies through the end of the decade. This year, more than a dozen renewable energy and electric vehicle companies have gone public, further enhancing the sector’s growth.
Abhinav Sinha of British International Investment Plc emphasized that climate-related investments are currently a hot topic for venture capital in India. The UK government’s development finance arm has committed to deploying at least $1 billion in India by 2026 for climate-related projects.
Despite these achievements, India still trails China in total green technology funding for the year, with $3.6 billion raised compared to China’s $5.6 billion. Achieving India’s net-zero target by 2050 will require substantial investments, estimated at $12.4 trillion.
The climate technology market in India is expected to expand rapidly as firms develop innovative solutions to reduce pollution. Investors, including Mumbai-based Avaana Capital, continue to back sectors such as electric mobility, solar financing, and agriculture. Anjali Bansal, founding partner of Avaana Capital, expressed optimism about the sector’s development.
