In a landmark move towards sustainable development, the Ministry of Finance, Government of India, has officially approved the issuance of Sovereign Green Bonds. These bonds mark India’s entry into the global green finance market and aim to fund eco-friendly projects that support the country's commitment to climate goals.
This move is aligned with India’s Panchamrit climate targets and its vision to become Net Zero by 2070.
Sovereign Green Bonds are government-issued debt instruments where the proceeds are exclusively used to finance or refinance projects that have positive environmental and climate benefits. These include projects in:
Renewable energy (solar, wind, biomass)
Clean transportation (electric mobility, railways)
Energy efficiency and green buildings
Climate-resilient infrastructure
Sustainable water and waste management
These bonds help India tap climate-conscious investors across the world.
| 🏛️ Feature | 📋 Description |
|---|---|
| Issuing Authority | Reserve Bank of India (RBI) on behalf of the Government of India |
| Size | ₹16,000 crore (₹8,000 crore in two tranches) in 2023-24 |
| Tenure | 5 years & 10 years (initially) |
| Use of Proceeds | Allocated only to green projects as per “Green Framework” |
| Green Framework | Developed by the Finance Ministry with international best practices |
| Listing | Bonds are tradable on major stock exchanges |
| Investor Interest | Domestic and foreign ESG investors, pension funds, sovereign funds |
The funds raised will directly support India’s green energy transition, infrastructure upgrades, and climate adaptation.
These bonds may attract lower interest rates compared to regular bonds due to high demand from ESG (Environmental, Social, and Governance) investors.
By issuing sovereign green bonds, India signals a strong commitment to climate financing, aligning with global sustainability goals.
The Green Bond Framework ensures clear project selection, impact tracking, and annual reporting—building investor trust.
The Finance Ministry has formed a Green Finance Working Committee (GFWC) that screens eligible projects. Selection is based on:
Environmental impact
Alignment with national priorities
Exclusion of projects like fossil fuel exploration, nuclear power, etc.
Annual reports will disclose:
Allocation of funds
Environmental impact (like CO₂ avoided, energy saved, etc.)
The RBI acts as the issuing and managing authority for the Sovereign Green Bonds. It conducts auctions, ensures compliance with the framework, and handles investor servicing.
“Sovereign Green Bonds are not only a new asset class but a new way of thinking about financing climate action.” — RBI Statement
India’s green bond debut in 2023 received strong interest from institutional investors, both domestic and global. The bonds were oversubscribed and priced lower than conventional G-secs—highlighting investor confidence.
Going forward, India is expected to:
Expand green bond issuances
Introduce municipal or state-level green bonds
Create a deeper market for ESG-aligned debt
Businesses in green sectors can benefit from easier access to funds and policy support
Investors have a stable, government-backed ESG option for portfolio diversification
Banks & financial institutions will play a key role in on-lending to green projects
Accounting and reporting frameworks may evolve for better ESG compliance
The approval and rollout of Sovereign Green Bonds by the Finance Ministry is a decisive step in India’s journey toward sustainable development and climate resilience. It strengthens India’s financial commitment to clean energy, green transport, and climate-smart infrastructure—setting the tone for a greener financial ecosystem.
🔗 TAXAJ is closely monitoring these developments and can guide you through ESG reporting, green finance eligibility, and investment readiness.
📞 Connect with us today to explore green tax benefits, project eligibility, and ESG compliance support.