New Delhi: Climate tech funding in India rose from USD 315 million in 2020 to USD 2.6 billion in 2025, with the growth largely driven by increased transactions in sectors such as electric mobility, renewable energy, and energy-transition infrastructure, according to a new report.
The India Climate Tech 2026 Report also stated that over the years, investor interest has increasingly shifted from funding climate innovation in isolation to backing companies enabling large-scale implementation of the energy transition.
The report was recently released by Tracxn, a data intelligence platform for private market research.
It highlighted that with roughly 85 per cent of India's crude oil imported, technologies like 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 change is being supported by several government initiatives, such as PM E-DRIVE, a Rs 10,900 crore programme extended to 2028, which aims to accelerate electric-vehicle adoption and charging infrastructure.
Another initiative is the Carbon Credit Trading Scheme, effective October 2026, which has established a compliance carbon market covering around 490 industrial units across nine sectors.
In addition, the Rare Earth Permanent Magnets (REPM) scheme, a Rs 7,280 crore programme, has strengthened domestic clean-energy supply chains, according to the report.
"India's dependence on imported crude oil and critical clean-energy inputs aligns directly with policy initiatives such as PM E-DRIVE, the REPM scheme, and broader critical-mineral programmes. As a result, policy support, private capital, and energy-security priorities are increasingly converging around the same set of climate tech sectors," said the report.
"This creates a stronger and potentially more durable investment case than one based solely on climate objectives," it added.
The report also revealed that climate tech companies in India have raised around USD 791 million across 74 funding rounds.
However, USD 524 million out of the total funding was concentrated in just five late stage deals, which shows that investors backed proven, well-researched, and large scale deployment businesses.
