India has recently surpassed China as a key destination for clean technology funding, reflecting its growing emphasis on renewable energy and sustainable innovation. In Q3 2024, India attracted US$ 2.4 billion in clean tech deals, over four times China’s figures for the same period, and second only to the U.S. globally. This surge is driven by policies aimed at enhancing local clean energy capacity and reducing dependence on Chinese imports. Efforts to position India as an exporter of clean technologies have further bolstered investor confidence.
India has surpassed China as a leading destination for clean technology funding in recent months, driven by efforts to enhance domestic green manufacturing. In the third quarter, deals worth US$ 2.4 billion were finalized in India, over four times China’s total and the second-highest globally after the US, according to BloombergNEF data. This surge is attributed to India’s focus on building local clean energy capacity, reducing reliance on China, and positioning itself as an exporter of green technologies, noted Raj Pai of GEF Capital Partners.
Prime Minister Narendra Modi’s policy initiatives have bolstered the clean energy sector, with the International Energy Agency forecasting India to experience the fastest growth in renewables among major economies through 2030. More than a dozen renewable energy and electric vehicle (EV) companies have gone public this year, including Waaree Energies Ltd. and Ola Electric Mobility Ltd. NTPC Green Energy Ltd.’s shares have surged by over 30% since their recent debut.
The climate sector is increasingly attractive to investors. Abhinav Sinha from British International Investment Plc highlighted that climate-related projects account for a quarter of all seed-stage investments in India, with BII committing US$ 1 billion to the sector by 2026. However, India’s US$ 3.6 billion in green tech funding this year still trails China’s US$ 5.6 billion, indicating room for growth. Achieving net-zero emissions by 2050, 20 years earlier than the current 2070 target, would require an estimated US$ 12.4 trillion in investment, according to BNEF.
Despite optimism, challenges persist. Only a quarter of India’s 800 climate-focused startups have raised funds in the past decade, securing US$ 3.6 billion compared to over US$ 19 billion for fintech firms. Growth-stage funding remains a hurdle, with startups needing to demonstrate scalability and significant customer traction, noted Akshay Shekhar, CEO of Kazam, an EV charging solutions provider.
Investors remain hopeful about the sector’s potential. Avaana Capital recently raised US$ 135 million to invest in energy, supply chains, and agriculture. Family offices and other funders are also increasingly supporting the sector, with Avaana’s Anjali Bansal expressing optimism about ongoing developments.
India’s clean tech market is poised for rapid expansion as the nation tackles pollution and advances its net-zero goals, making it a global hotspot for climate technology investments.
