The Financial Pathway: Anjali Bansal

India's goal to achieve net-zero emissions is a defining opportunity to shape the next chapter of our economic and industrial growth journey to meet the aspirations of 1.4 billion people. The path to this will inevitably influence how industries evolve, how global partnerships are forged and how India positions itself as a leader. Innovation and scaling up solutions will enable us to achieve our ambitious targets. Across critical sectors—energy, supply chains, mobility, advanced materials, precision engineering, bio tech, agriculture and more—breakthrough technologies will be essential.

While the technological roadmap may be emerging, the financial pathway to finance this innovation at the scale and pace it demands remains complex and challenging. Estimates suggest that India will need to invest close to $1 trillion annually through 2050 to stay on course. This figure, nearly six times our current deployment, underscores the scale of transformation required. Public or catalytic finance alone cannot meet this need; private capital must step in to close the gap.

This calls for a fundamental shift. Transition finance cannot be viewed as concession or subsidy driven. Instead, it must be recognised as strategic capital, aligned with growth objectives and generating handsome returns. It should enable scale, support innovation and reward performance. Such capital cannot be monolithic. It must span a spectrum of instruments and risk appetites suited to the stages of technological and business maturity. A complete capital stack, spanning various stages of risk and returns, is required.

In the earliest stages of innovation, for example, high-risk and patient capital is required as new technologies are proven and markets developed. Here, public funding, private philanthropy, R&D and first-loss capital make it possible to test new ideas without burdening the ventures with commercial expectations too soon. As these technologies find product-market fit and show viability, venture equity can step in to fuel early scaling-up efforts.

As companies grow and the need to build manufacturing capacity or infrastructure emerges, products such as structured debt and growth equity along with parametric insurance become important to support expansion while balancing risk and return. For large-scale deployment and adoption, blended finance models, guarantees, risk sharing facilities and currency hedging will be required to attract institutional and long-term investors. These structures de-risk investments and make them viable for pension funds, sovereign wealth funds and other large pools of capital. Innovation is required in financing products and capital structures. Deep-tech solutions and large-scale transition infrastructure demand patient, flexible capital that does not conform to rigid fund cycles or standard project finance models. Hybrid approaches—blending equity and debt, incorporating outcome-based incentives—will be essential to balance risk and attract a diverse range of investors.

India’s net-zero transition also requires continued investment in large-scale infrastructure, manufacturing ecosystems, grid modernisation and supply chain upgrades. These are the enablers that will support the mainstreaming of new technologies. For this reason, collaboration across the financial landscape becomes critical. Sovereign investors, development finance institutions, commercial banks, private markets, all have a role to play in creating interconnected pathways that channel capital efficiently and effectively.

Financing solutions must be tailored to the maturity and commercial readiness of a sector. Areas like renewable energy and electric mobility are now sufficiently advanced to attract commercial investment with limited risk sharing. However, nascent areas like energy storage, adaptation for MSMEs and agri economy may still require concessional or outcome-based capital and risk sharing mechanisms in the medium term. Over time, as these models mature, and market efficiency kicks in, they too can move towards commercialisation.

Regulatory frameworks also have to keep pace—from enabling new fund formats and first-loss structures to ensuring that capital adequacy norms and credit rating systems account for transition risks and climate-linked investments. Ultimately, mobilising financing for India’s net-zero transition is not simply about raising more capital. It is about building the right institutional capacity, designing smarter financial products and creating a regulatory environment that recognises and rewards innovation and long-term value creation.

Capital availability, though essential, is only one part of the equation. Markets must also be built and deepened. Clear price signals, long-term procurement commitments, demand aggregation platforms and stable policy environments will be instrumental in creating investable markets in emerging sectors such as green hydrogen, decentralised energy, advanced materials and the circular economy.

Governments will continue to play a pivotal role in creating conditions for market development and growth. By defining offtake requirements, setting standards and introducing outcome-linked incentives, policymakers are laying strong foundations that reduce risk and catalyse private investment. These measures send clear signals to the market, encouraging early participation and supporting the scale-up of emerging solutions. Government-backed frameworks for certification and benchmarking build trust and transparency across the value chain and lower financing costs, making innovation more accessible and investable. The moment to act decisively—to align capital with ambition and innovation with scale—is now. 

Views are personal