Subscribe
India’s climate tech sector has drawn $12.8 billion across 1,583 firms.
Annual funding has jumped from $315 million in 2020 to $2.6 billion in 2025.
Energy security, policy support and private capital are driving large late-stage deals in renewables, e-mobility, storage and industrial decarbonisation as the ecosystem matures.
India’s climate technology sector has attracted about $12.8 billion in cumulative funding across 1,583 funded companies, as concerns over energy security, industrial competitiveness and climate goals increasingly converge to shape investment decisions, according to a new report by Tracxn.
The India Climate Tech 2026 Report, released by the global market intelligence platform on June 4, found that annual climate tech funding in India rose from about $315 million in 2020 to $2.6 billion in 2025. The report highlights how government policy support, private capital and the country’s energy transition priorities are increasingly reinforcing one another.
The report identifies India's dependence on imported fossil fuels as a key factor underpinning climate technology investments. With roughly 85 per cent of the country's crude oil requirements met through imports, technologies such as renewable energy, electric mobility, battery storage and critical minerals are now being viewed not only as climate solutions but also as tools for improving energy security.
This alignment is strengthening the business case for climate technologies by creating dual incentives for investment and deployment.
India's climate policy framework has also evolved from encouraging technology adoption to supporting large scale deployment and domestic manufacturing. Among the major policy measures cited in the report is the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, a Rs 10,900 crore programme extended until 2028 to support electric vehicle adoption and charging infrastructure.
The report also highlighted the Carbon Credit Trading Scheme (CCTS), which is scheduled to become operational in October 2026 and will establish a compliance carbon market covering around 490 industrial units across nine sectors.
In addition, the Rs 7,280 crore Rare Earth Permanent Magnets scheme aims to strengthen domestic supply chains for clean energy technologies and reduce dependence on imported materials.
While overall funding has expanded significantly, the report notes that investors are increasingly backing fewer but larger transactions.
Climate tech companies in India have raised around $791 million across 74 funding rounds so far in 2026. However, about 66 per cent of this funding was concentrated in just five late stage deals, indicating growing investor preference for proven business models and large scale deployment opportunities.
Among the largest transactions, Inox Clean Energy secured a $344 million Series D round in 2026, while Erisha E Mobility raised $1 billion in a Series D round in 2025.
Development finance institutions continue to play a significant role in supporting India's climate transition. The report notes that British International Investment (BII) participated in three major funding rounds involving Euler Motors, GreenCell Mobility and Ecofy.
Other active institutional investors include the International Finance Corporation (IFC), Dutch entrepreneurial development bank FMO and Finnish development financier Finnfund.
According to Tracxn, continued participation by these institutions reflects sustained confidence in India's long term energy transition prospects.
Renewable Energy Tech emerged as the largest climate technology segment by cumulative funding, attracting $1.5 billion.
The report attributes this to the capital intensive nature of renewable power generation and associated grid infrastructure.
Notable transactions in the segment include Inox Clean Energy's $344 million Series D round and an earlier $70 million Series C raise.
However, the report also points to increasing diversification within India's climate technology ecosystem.
Solid Waste Management Tech has attracted $477 million in cumulative funding, while Energy Efficiency Tech has raised $352 million.
Air Pollution Management Tech has secured $237 million and Water and Wastewater Management Tech has attracted $208 million.
Together, these four segments have drawn more than $1.2 billion, indicating growing investor interest in resource efficiency, environmental management and industrial sustainability solutions.
The report concluded that India's climate technology ecosystem is entering a new phase of maturity, with policy support, institutional capital and energy security concerns increasingly aligned around the same set of technologies.
As deployment scales across renewable energy, electric mobility, storage systems and industrial decarbonisation, the sector is expected to witness deeper capital formation alongside continued growth in the coming years.