India Needs $22.7T Investment to Achieve Net Zero Target by 2070: Niti Study
•February 10, 2026
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Why It Matters
The financing gap underscores the critical role of international capital and financial market reforms in India’s climate transition, influencing both climate outcomes and the country’s development trajectory.
Key Takeaways
- •$22.7 trillion total investment needed for 2070 net‑zero.
- •Annual financing gap about $500 billion versus current $135 billion.
- •$8 trillion must be spent before 2050, $5 trillion in power.
- •External capital to cover $6.5 trillion gap, 42% of needs.
- •GDP projected $30 trillion by 2047, growth remains resilient.
Pulse Analysis
India’s pledge to hit net‑zero by 2070 has moved from ambition to a quantified financial roadmap. The Niti Aayog study translates climate goals into a $22.7 trillion investment horizon, equivalent to $500 billion each year. This figure dwarfs today’s $135 billion annual energy spend and highlights a stark shortfall that must be bridged through both domestic mobilization and foreign inflows. By front‑loading $8 trillion—half of it for power generation—the country aims to lock in low‑carbon assets before 2050, setting a foundation for a decarbonised grid.
Closing the $6.5 trillion financing gap will hinge on structural reforms. Deepening the corporate bond market, channeling household savings into green assets, and expanding institutional investor mandates can unlock domestic capital. Simultaneously, scaling foreign direct and portfolio investment, backed by credible project pipelines and concessional financing, is projected to supply 42% of total needs by 2070. Policy instruments such as the sovereign green bond programme, the green hydrogen mission, and an emerging carbon market are designed to crowd in private funds, while international climate finance can de‑risk early‑stage technologies that are not yet commercially viable.
Economically, the study reassures that the net‑zero pathway will not derail growth. India’s GDP is forecast to hit $30 trillion by 2047, with net‑zero scenarios altering long‑term output by less than 0.5%. This resilience stems from the financing structure: external capital eases pressure on domestic savings, preventing crowding‑out of private investment. As India balances development priorities with climate imperatives, the ability to marshal innovative finance will become a decisive factor for both its climate credibility and its aspiration to become a "Viksit Bharat" by 2047.
India needs $22.7T investment to achieve net zero target by 2070: Niti study
India will need investments totalling $22.7 trillion to reduce greenhouse gas emissions and achieve the net zero target by 2070, a Niti Aayog study said.
On an annualised basis, this cumulative requirement translates into average flows of approximately $500 billion per year, compared with actual annual investment of around $135 billion in 2024, of which only $70–80 billion currently supports clean energy, said the Niti Aayog's study report on 'Scenarios Towards Viksit Bharat and Net Zero: An Overview'.
Of the total, approximately $8 trillion must be front-loaded by 2050, including nearly $5 trillion in the power sector, given the capital-intensive nature of most low-carbon technologies.
The Net Zero Scenario reflects an ambitious pathway aligned with India's commitment to achieve net zero GHG emissions by 2070.
With coordinated domestic and external reforms, India could credibly mobilise around $16.2 trillion towards its net zero transition by 2070 through a structural expansion in the scale, depth and efficiency of available capital, the study said.
Domestically, this entails deepening the corporate bond market, increasing the financialisation of household savings, and enabling institutional investors to invest in new areas, while safeguarding returns through diversified, high-quality corporate and green assets, the study said.
Externally, scaling FDI (foreign direct investment) and FPI (foreign portfolio investment), supported by credible transition roadmaps, a strong pipeline of bankable projects and deeper financial markets, would anchor sustained foreign capital inflows.
"Against the Net Zero Scenario investment requirement of $22.7 trillion and estimated aggregate flows of $16.2 trillion, a financing gap of $6.53 trillion remains. Given domestic constraints and the risk of crowding out and higher interest rates, this gap is expected to be met largely through external sources, raising the share of international sources to 42% of total capital needs by 2070, rising from 17% in 2022–23," it said.
International capital, particularly concessional finance and grants, will therefore be critical to supporting technologies essential for net zero that are not yet commercially viable.
"Realising India's aspirations of becoming Viksit Bharat, i.e., a developed economy by 2047 and achieving the net zero goal by 2070 will require an enabling ecosystem that spans robust institutions, innovative finance, integrated data systems, and strategic planning," the Niti study said.
The study also said the net-zero transition has a limited impact on long-term GDP growth but demands high investment.
"India's GDP is projected to stay broadly resilient even in Net Zero scenarios, reaching $30 trillion by 2047, which is aligned to the Viksit Bharat goal," it said.
While the transition demands massive capital mobilisation, scenarios with a higher share of foreign financing limit total GDP variations to about 0.5% by 2050.
"This highlights the importance of the financing structure: mobilising external capital, such as FDI, prevents pressure on domestic savings and avoids crowding out private investment," the Niti study said.
The study examines India's transition through two principal scenarios: the Current Policy Scenario and the Net Zero Scenario.
The Current Policy Scenario represents a level of effort that is realistically achievable based on historical trends and continuation of current policies (as of 2023), thereby projecting ongoing trends in low-carbon technology deployment.
Total investment requirements are estimated at $14.7 trillion under the Current Policy Scenario.
The Net Zero scenario reflects an ambitious pathway aligned with India's commitment to achieve net zero greenhouse gas (GHG) emissions by 2070.
It incorporates both existing and additional policy measures to accelerate demand electrification, enhance circularity, improve energy efficiency, promote the rapid development of low-carbon technologies/fuels and encourage behavioural shifts.
India’s financing challenge is particularly significant given its development priorities, rising energy demand, and heavy reliance on coal, which still accounts for more than half of electricity generation. While India has emerged as one of the world’s fastest-growing renewable energy markets, grid modernisation, energy storage, green hydrogen, and industrial decarbonisation remain underfunded relative to scale.
Policy initiatives such as India’s green hydrogen mission, carbon market framework, and sovereign green bond programme are expected to play a critical role in crowding in private capital.
The Niti Aayog study adds to a growing body of evidence suggesting that India’s net-zero pathway is less constrained by economic growth impacts and more by the availability, cost, and structure of finance, making international cooperation and financial innovation central to achieving both climate and development goals.
(With inputs from PTI)
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