Paper Details

India aims to achieve net-zero emissions by 2070. To achieve this commitment, it is pivotal for India to transition to a low-carbon and climate resilient economy. Projections indicate multi-million-dollar capital flows as necessary across clean energy, sustainable agriculture, waste management, and mobility systems, and achieving this goal will require unprecedented levels of investments. While public finance and multilateral support remain crucial, private investment, particularly in the form of venture capital (VC) is emerging as a significant enabler of climate-tech innovation. This study uses a qualitative and exploratory methodology to examine the impact of venture capital in developing India’s climate-tech innovation between 2015 and 2025. Findings show that India is home to a growing number of climate-tech startups, with over 800 firms operating across domains like renewable energy, electric mobility, waste-to-value, and sustainable agriculture. Despite inflow of several billion dollars in VC in the last decade, majority of capital is concentrated in mobility and early-stage funding sectors, while later-stage financing and less commercially visible sectors remain underfunded. High risk perception, limited exit options, and regulatory ambiguity are major challenges. There exist opportunities in India's policy push and ESG-driven global finance. The study concludes that while venture capital is an essential catalyst for climate innovation, it is not enough on its own; institutional support, policy alignment, and integration into a larger ecosystem of blended finance are also crucial.

Venture Capital, Climate-Tech Startups, Sustainable Finance, Green Economy, India, Climate Innovation, Low-Carbon Transition