Last week, the Climate Policy Initiative released an update on India’s first-ever efforts to track green investment flows. These 2019-2020 figures show that India received less than a fourth, US $37.5 billion, of what is required to meet its green finance and emissions reduction goals.
So what?
Although there’s been a groundswell of startups in the climate tech space in India (approximately 2,500 have been listed in this segment), most of these are small and receive smaller cheques compared to their counterparts in evolved funding markets.
According to a 2021 study by the Impact Investors Council (IIC), 53% of the deals between 2016-20 in Indian climate tech were sub-US $1 million. Moreover, conversion from seed capital to series A has been low, at about 17% compared to 29% internationally over a 3-year horizon. These metrics highlight that in spite of the growth in early-stage startups, their mere existence cannot solve the structural issues that persist in India’s green financing.
Sources
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India's annual green finance just one-fourth of its needs, finds study https://www.business-standard.com/article/current-affairs/india-s-annual-green-finance-just-one-fourth-of-its-needs-finds-study-122081100004_1.html - https://www.climatepolicyinitiative.org/wp-content/uploads/2020/09/Landscape-of-Green-Finance-in-India-1-2.pdf
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