New Delhi: India’s ambitious clean-industry revolution, once hailed as a defining pillar of its net-zero roadmap, is facing significant obstacles. Despite boasting one of the largest portfolios of industrial decarbonization projects among emerging economies, a new report warns that financial barriers and bureaucratic slowdowns are preventing progress from moving beyond paper plans.
According to the Mission Possible Partnership (MPP), a global alliance promoting industrial transformation, India currently has 53 clean-industry projects in the pipeline equal to Australia in sheer volume. These initiatives, which span green hydrogen, low-carbon steel, and sustainable cement, hold the potential to drastically reduce industrial emissions and reposition India as a leader in green manufacturing. Yet, not a single project has reached a Final Investment Decision (FID) this year, reflecting how deep the structural bottlenecks have become.
At the heart of India’s clean-industry struggle lies the cost of financing. Clean-energy ventures in India face some of the highest interest rates among major developing economies. With limited access to concessional capital and weak domestic green-bond markets, most projects are unable to secure long-term funding at sustainable rates.
Industry observers note that international investors remain hesitant due to regulatory uncertainty and uneven enforcement of climate policies. “While global capital is ready to flow, investors need clearer frameworks, stronger guarantees, and faster approvals,” the report emphasized. Without financial de-risking mechanisms such as sovereign guarantees, credit enhancements, or blended finance support India’s clean-industry boom risks remaining a vision rather than a reality.
Even when capital is available, regulatory bottlenecks are slowing implementation. Sectors such as cement and steel, critical to India’s industrial backbone, are still governed by outdated construction norms that discourage the use of low-carbon materials. For instance, sustainable alternatives like calcined clay and green cement blends remain underutilized due to a lack of standardized codes and approval pathways.
The report highlights the need for a modernized regulatory environment one that aligns industrial permits, environmental clearances, and power access. Delays in land acquisition and inconsistent state-level procedures often stall projects for months, eroding investor confidence.
A crucial missing link in India’s clean-industry transition is demand-side regulation. Without government-backed procurement rules or blending mandates, industries have little incentive to switch to costlier low-carbon products. This has resulted in a demand vacuum, particularly in sectors like steel, aluminum, and fertilizers, where green alternatives struggle to compete with conventional options.
Experts argue that India must introduce green public procurement policies where government projects prioritize low-carbon materials to create initial demand and push private industries to follow. Such measures have proven successful in Europe and parts of East Asia, where governments have actively shaped markets for sustainable goods.
The global landscape underscores the urgency of India’s challenge. Out of 19 clean-industry projects worldwide that reached FID this year, 12 were in China, reflecting Beijing’s aggressive industrial decarbonization push. In contrast, India’s 53-project pipeline remains largely inactive. The report estimates that the total value of projects outside China many in India, Brazil, and Indonesia could reach $140 billion, if unlocked through better policy alignment.
Without decisive action, analysts warn, India could lose its early-mover advantage to countries offering faster permitting, clear market incentives, and more affordable financing.
The consequences of delay extend beyond climate goals. India’s heavy industries collectively contribute nearly 30% of national greenhouse gas emissions, meaning prolonged inaction will derail its 2070 net-zero target. Moreover, each stalled project represents lost opportunities for green jobs, innovation, and export potential in sectors like renewable hydrogen and green steel.
If momentum is not regained soon, India risks being perceived as a “high-ambition, low-execution” market an image that could deter foreign investors and multinational corporations seeking cleaner supply chains.
The Mission Possible Partnership urges India to adopt a coordinated policy package to revive its clean-industry momentum. This includes:
• Lowering financing costs through concessional lending, green-bond expansion, and sovereign guarantees.
• Modernizing regulations to integrate cleaner construction materials and industrial technologies.
• Introducing demand-side incentives, such as green procurement laws and carbon pricing mechanisms.
• Strengthening inter-ministerial coordination to fast-track clearances and standardize project approvals nationwide.
Such steps could unlock billions in investment and help transform India into a global hub for sustainable manufacturing.
India’s industrial transition stands at a crossroads. The vision of becoming a clean-energy superpower is within reach but the pathway is strewn with financial, regulatory, and bureaucratic hurdles. The next two years will be decisive. If the government can align policy, finance, and industry, the country may yet reclaim its leadership in the clean-industry race.
Otherwise, the promise of a “Green Make in India” may remain just another blueprint in the archives of unrealized potential.