India’s Ministry of Finance has released a draft climate finance taxonomy to guide climate-related investments. Announced in the 2024 Union Budget, the framework defines what counts as ‘green’, aiming to increase transparency and attract more funding for climate action. The public can give feedback until June 25, 2025.

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• Draft taxonomy defines ‘climate-relevant’ activities for finance, investment
• Focus on three pillars: Mitigation, adaptation, hard-to-abate sectors
• Covers sectors like power, mobility, agriculture, buildings, water, cement, steel
• Uses two-part method: qualitative principles + measurable performance targets
• Projects grouped into climate supportive and transition supportive categories
• Tiered classification for climate supportive: absolute reduction or pathway to it
• Aims to prevent greenwashing and increase investor confidence
• Aligns with ASEAN standards, to be updated over time
• Framework open for public input till June 25, 2025
• Seen as key step to attract funding, meet India’s climate targets by 2030