The Economic Survey 2025-26 underscores that India has adopted a development-centred, whole-of-economy climate strategy, integrating adaptation, mitigation, and behavioural change within its broader growth model. The Survey, tabled in Parliament by Finance Minister Nirmala Sitharaman, notes that the global climate agenda has reached an inflection point, where ambition increasingly collides with capacity constraints, system fragilities, and execution gaps.
Against this backdrop, India’s approach prioritises human welfare, resilience, and macroeconomic stability, especially for climate-vulnerable populations, recognising that development itself functions as adaptation.
Adaptation at the Core: Building Climate Resilience Through Development
Adaptation is identified as central to India’s climate strategy. The Survey highlights a development-led approach driven largely by public investment: Adaptation and resilience-related domestic spending rose from 3.7% of GDP in FY 2015-16 to 5.6% of GDP in FY 2021-22.
Institutional Architecture
- The National Action Plan on Climate Change (NAPCC), implemented through nine missions, anchors climate action, with several missions focused on resilience (e.g., Sustainable Agriculture, Water).
- State Action Plans on Climate Change (SAPCCs) translate national objectives into sector-specific, locally contextualised actions.
- As urbanisation accelerates, the Survey stresses embedding climate risk into urban planning, affecting land use, infrastructure, and service delivery.
Mitigation: A Calibrated Transition to a Low-Carbon Economy
India’s mitigation strategy balances decarbonisation with energy security and affordability. The Survey cautions that rapid deployment of complex systems without buffers, redundancy, and institutional capacity can increase fragility. Hence, India frames the coming decade as an energy system transition, not a narrow emissions exercise.
Clean Energy and Strategic Transitions
- FY 2025-26 saw accelerated clean energy momentum via rapid renewable additions, green hydrogen, and nuclear.
- Non-fossil fuel sources accounted for 51.93% of installed power capacity as of end-December 2025, surpassing the 50% milestone.
- Supporting initiatives include the National Nuclear Mission, Green Hydrogen Mission, and Bio Energy Programme.
- Key constraints remain materials availability and energy storage.
Critical Minerals: The New Constraint in the Energy Transition
The Survey emphasises that the energy transition is increasingly shaped by control over critical minerals, lithium, cobalt, nickel, copper, and rare earths.
India’s Strategy
- Domestic capability building via the National Critical Mineral Mission.
- International partnerships (e.g., Minerals Security Partnership, Indo-Pacific Economic Framework).
- KABIL has acquired 15,703 hectares in Argentina for lithium mining, with partnerships in Australia and Chile.
Nuclear Reform: SHANTI Act
The SHANTI Act (December 2025) enables private participation across nuclear plant operations, generation, equipment manufacturing, and R&D, strengthening nuclear power’s role in India’s clean energy mix.
Carbon Markets: From Framework to Implementation
The Carbon Credit Trading Scheme (CCTS) (June 2023) operates through:
- A compliance mechanism (building on PAT), and
- A voluntary offset mechanism enabling non-obligated entities to earn Carbon Credit Certificates (CCCs).
Mission LiFE: Behavioural Change as Policy Bedrock
Mission LiFE (Lifestyle for Environment), launched at COP26 (2021), is positioned as the behavioural foundation of India’s climate policy and an integral part of its NDCs, reshaping consumption patterns, social norms, and daily choices rather than operating as a parallel initiative.
Climate Finance: Scale, Stability, and Structure
The Survey highlights a global climate finance gap of ~USD 4 trillion, disproportionately affecting developing countries.
India’s Profile
- 83% of mitigation finance and 98% of adaptation finance are domestically sourced.
- Finance remains skewed toward mature sectors (solar, wind), while adaptation, MSMEs, urban infrastructure, and hard-to-abate sectors are underfunded.
Strengthening Domestic Finance and Bond Markets
Institutions and Regulation
- IREDA, NABARD, SIDBI, PFC, REC support project preparation, bankability, and catalytic capital.
- Regulatory enablers include SEBI’s BRSR, green bond guidelines, and IFSCA’s sustainability-linked lending framework.
Green Bonds
- Sovereign Green Bonds: ₹15,000 crore in FY 2025-26; ₹72,697 crore cumulatively since FY 2022-23.
- Municipal issuances (e.g., Indore, Ghaziabad, Ahmedabad, Vadodara) could unlock USD 2.5~6.9 billion over 5-10 years.
- India’s Greenium is intermittent (0-6 bps), supported by credible frameworks and strong domestic demand.
International Finance and MDB Reform
Despite ample global liquidity, flows to the Global South are constrained by risk aversion. The Survey calls for MDB reform, from “originate-to-hold” to “originate-to-share”, to mobilise private capital via guarantees, insurance, and blended finance while preserving stability.
Conclusion
The Economic Survey 2025-26 presents India’s climate pathway as pragmatic, development-first, and system-aware, integrating resilience, clean energy, behavioural change, and finance without compromising macroeconomic stability. The strategy balances ambition with capacity, positioning India for steady progress amid global uncertainty. (Source: PIB PR ID 2219915)
Economic Survey of India 2025-26 dated 29/01/2026