New Delhi: The Confederation of Indian Industry (CII) has recommended that the government announce a Green Finance Institution (GFI) in the upcoming Union budget for FY27 to mobilize large-scale, low-cost capital for India's green transition across renewable energy, clean mobility, green buildings, and industrial decarbonization.
The green finance institution should be domiciled in GIFT City to leverage regulatory flexibility and attract foreign capital, the industry body said in a statement.
The industry body noted that achieving net zero by 2070 requires nearly $10 trillion in total green investments, with $1 trillion expected to be invested over the next 10-15 years. However, current green finance flows cover only about 25% of this need, highlighting significant gaps in the availability of long-term, low-cost capital.
Finance minister Nirmala Sitharaman will present the Union budget for the next financial year on 1 February in Parliament, and energy transition is expected to be a key focus area for the government.
"This could be structured as an intermediary (not a balance-sheet lender) and seeded by multilateral development banks, sovereign wealth funds, and philanthropies entailing no direct fiscal outlay from the government. It could offer concessional loans, equity support, credit guarantees, and securitization of small-scale green assets to reduce project financing costs," CII said.
Chandrajit Banerjee, CII director general, said, “As India moves closer to its goal of becoming a $5 trillion economy, advancing a green economy is no longer a choice but a strategic necessity. This transition is vital not only for meeting climate goals but also for shaping India’s long-term growth, competitiveness, and global standing.”
He further said that a holistic approach to decarbonization is a necessity where transition finance, circularity and a robust environmental, social, and governance (ESG) reporting ecosystem are prioritized, in addition to the focus on renewables and green mobility.
Green tech fund
A Deloitte report published in July projected a requirement of $1.5 trillion investment by 2030 across key areas to address the climate challenge at scale, through renewable energy, biofuels, decarbonisation and sustainable infrastructure.
CII, in its budget recommendations, has also asked the government to establish a 'Green Tech Expo Fund’ to help globalize India’s green tech innovations. "The fund could support participation of Indian enterprises engaged in producing green technology, in global sustainability and technology expos, facilitating collaborations with global investors, buyers, and technology partners," the statement said.
Amid high import dependence on critical minerals and the need for circularity and recycling, it has been suggested to mandate recycling and urban mining targets for lithium batteries and electronics, along with strict certification, to curb the export of unprocessed scrap. Urban mining is the process of recovering valuable materials from urban waste, such as discarded electronics, construction materials, and consumer goods.
Fiscal incentives and fast-track clearances could be facilitated to boost domestic refining capacity and strategic stockpiling of recovered critical minerals, it added.
"There is a lack of scale and clustering in recycling value chains, resulting in a dispersed network of small facilities that struggle with poor economics, low recovery rates, and weak incentives for adopting advanced technologies. Policy should support the development of 15 Circular Economy Parks (CEPs) over the next 3 years, expanding to 45 in 5 years, with a focus on key waste streams including e-waste, plastics, tyres, and batteries. Additionally, a national programme could be launched to establish large-scale multi-material recycling parks near major urban centres," the CII statement said.
Establishing such an institutional framework can create a robust recycling ecosystem, reduce dependence on virgin resources, and drive technological innovation, it said.
The Union government has already prepared a ₹1,500 crore incentive scheme for the recycling of critical minerals. A recent mines ministry statement said that a significant number of entities have so far registered on the portal designated for receiving applications.