Incentivisation of green technologies in India

India, with a base of 1.5 billion people and a USD3.3 trillion economy, has enormous potential for innovation, inception and successful implementation of modern technologies, including green ones. Recently, the Indian economy has not only demonstrated covid resilience but also robust growth across many sectors. According to the International Monetary Fund, India is expected to show economic growth of 8.2% in 2023, which would be on par with the growth of the world’s leading economies.

The pandemic and the Russia-Ukraine conflict have led developed countries to consider not only diversifying their energy baskets from different regions, but also to diverse sources of energy. The sooner-than-expected emergence of telltale signs of climate change have forced governments across the globe to consider reducing dependence on non-renewable energy sources and look for cleaner alternatives. Despite the growing need for energy, India has committed to an ambitious pledge of achieving net-zero carbon emissions by 2070 and is already in the process of reforming its energy sector to embrace green energy. The country’s energy sector has doubled the total installed capacity of renewable energy to 100GW in the past five years.

With strong commitments to climate change and phasing down the use of coal and other fossil fuels for growing energy needs in the years to come, India presents opportunities for innovation and investment in the field of green technologies.


Adoption and promotion of green technologies in India is a conscious effort to reduce dependency on non-renewable energy sources and to attain nationally determined contributions, as part of the climate action plan to cut emissions. These actions are very much aligned with different policies aimed at the sustainable economic development of the country.

In India, there have been several efforts, which directly and indirectly helps the adoption of green technologies. Important among such efforts are the Aatma Nirbhar Bharat Abhiyan, or self-reliant India campaign. This initiative propelled the government to revise the criteria for the classification of micro, small and medium-sized enterprises and easy registration by interlinking different portals to provide a one-stop interface for a diverse range of regulatory and other business requirements like credit facilitation, skill development and recruitment, adoption of stringent emission and waste management laws, reduction of coal use for power generation and the promotion of electric mobility, all of which ensures adoption of green technologies.


India has long realised the need to adopt green technologies and has considered it as one of the national priorities for more than two decades in order to address environmental issues caused by non-green technologies, which damage the environment beyond repair and are a threat to sustainable growth and development.

However, there are teething problems related to the adoption and implementation of green technologies. For instance, green technologies in general are not economical and are also labour-intensive. Unlike developed countries, which are technologically advanced and have the capital to adopt green technologies, a full-fledged transition to green technologies for a developing country like India is not easy.

Due to constantly updated policies spread across different sectors to promote sustainable development, India now has a huge demand for green technologies. India also has the potential to exploit the labour-intensiveness of green technologies as an opportunity to cater to employment requirements. Other factors that place India in an advantageous position are its large domestic market and having an established industry in low-carbon environmental goods and services.


Extensive policies and programmes across different sectors have promoted the adoption of green technologies for sustainable development. Sectors where policies are remarkably successful in switching to green technologies are:

Energy is one of the sectors dominated by green technologies. A multitude of policies are in place for replacing non-renewable energy sources with clean and green energy sources such as solar, wind, small hydro, and biofuels. The installed capacity of the green energy sector in India stood at 94.43GW in 2021, with a target to reach 275GW by 2027. The country is also aiming to increase the share of natural gas in the energy mix to 15% by 2030 from the current 6.3%. Thus, there are huge investment opportunities for green technologies across the energy sector.

Transport and the energy-intensive industrial sectors in India are supported by several policies for the adoption of green technologies, including the National Electric Mobility Mission Plan, the Faster Adoption and Manufacturing of Electric Vehicles scheme, stringent emission standards to regulate the output of air pollutants from compression ignition engines, a battery swapping policy, and energy efficiency standards for appliances. The electric vehicle market is showing steady growth and is expanding at a remarkable compound annual growth rate of 42.8%. India’s commitment to target 30% electric vehicles by 2030 is a cumulative investment opportunity worth as much as USD266 billion.

Wastewater treatment is another important market segment in India, where green technologies have been focused, and is estimated to reach USD35 billion by 2026.


The foreign trade policy (FTP) of India is one of the most crucial policies for facilitating trade across borders. The FTP also focuses on areas such as bilateral and multilateral commercial relations, special economic zones, promotion of exports, facilitation of trade, regulation and development of commodities oriented towards exports. Despite several constraints like infrastructure, cost of transactions, procedural complexities, manufacturing constraints and inadequate diversification of exports, India has already signed the trade facilitation agreement at the World Trade Organisation (WTO).

The existing FTP, which extends until 30 September 2022, is expected to be replaced with an FTP that will introduce a new paradigm of regulatory and operational frameworks to reduce transit costs and create a low-cost operating environment. Policymakers are seriously considering and adapting input received from diverse stakeholders like investors, traders and exporters for the new FTP to develop an ecosystem that nurtures simplified and efficient trade by streamlining the regulatory and transaction processes, which are crucial for cross-border trade.

Some of the significant changes that can be expected from the new FTP will focus on ease of doing business and incentivisation of green technologies, which will help to improve energy efficiencies and sustainable developments across sectors.

The Indian government has already taken significant steps to withdraw subsidy-led schemes and the new FTP will provide more WTO-compliant schemes to provide a level playing field for investors across the globe. It is expected that the new FTP will also introduce tax incentives compliant with the WTO, easy access to credit, upgrading of infrastructure and technology, reduction of corporate tax rates and simplification of duty structures, and digitisation and unification of portals related to doing business. The government has fairly reconciled its FTP to provide better participation and opportunities in sectors espousing green technologies, which will be supported in parallel by other domestic policies encouraging green technologies.

Although India has launched a multitude of schemes for strengthening and faster adoption of green technologies, there is room for other actions that would establish the much-required effective system to promote and strengthen green technologies at various levels.

Incentivisation of innovation, advancements, and adaptation of green technologies play a crucial role in offsetting the heightened economic implications of green technologies. India is taking cues from the stakeholders seriously, and is already providing concessional tax rates to companies investing in green technologies. IP protection for green technologies should also be promoted by adopting fast-track procedures or provisions like the patent prosecution highway to speed up the examination and grant of patents for inventions related to green technology. Green technologies, which are based on cradle-to-cradle design and focused on the reclamation of materials, should be prioritised at all levels for sustainable development.

The legal framework to facilitate and promote collaboration is another aspect that will promote the development and deployment of green technologies. A policy framework to promote technology transfer in green technologies on mutually beneficial terms should also be developed, rather than simply gaining access to such technologies. It is imperative to change policies related to funding, insurance and access to market.

Upgrading of technology needs to be fine-tuned for the promotion and adoption of green technology, rather than acting as a barrier to the development and deployment of green technologies.

To conclude, India’s continually evolving policies and reforms focused on ease of doing business and attaining nationally determined contributions are clearing a path for faster adoption of green technologies and for facilitating investors across the globe.

Prioritization of policies and programmes across different sectors in India to promote faster adoption of green technologies have opened an array of opportunities for innovators and investors. Published on Asia Business Law Journal, authored by Manisha Singh and Pradeep Kumar Kamal