On May 8, 2025, India’s Finance Ministry unveiled a draft Climate Finance Taxonomy. It outlines how sustainable economic activities will be defined to attract large-scale investments needed to meet India’s climate targets. The taxonomy aims to prevent greenwashing and ensure efficient use of funds for climate-friendly projects.

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• India targets net zero emissions by 2070, 45% emissions intensity cut by 2030
• $2.5 trillion needed to meet 2030 climate targets
• Draft taxonomy to guide capital towards green, low-emission projects
• Two categories: “climate-supportive” and “transition-supportive” activities
• Focus sectors: steel, cement, power, transport, buildings, agriculture, water
• Aims to improve energy efficiency in hard-to-abate sectors
• Prevents greenwashing by clear classification of sustainable projects
• Builds on global taxonomy models (EU, UK, Singapore, etc.)
• Consultation open till June 25, 2025 for public feedback
• Final taxonomy will include detailed sector-wise annexes and principles