The Climate Policy Initiative (CPI) has unveiled its latest report, Sustainable Finance Flows to India’s Agriculture Sector, providing a detailed analysis of financial flows that can drive the transformation of Indian agriculture into a sustainable and climate-resilient sector.
The report maps the sources of public and private finance, intermediaries, and end-use activities across India’s agricultural value chain during the financial years 2020-21 and 2021-22. Offering actionable insights for policymakers, regulators, financial institutions, and private investors, the report identifies opportunities to enhance sustainable agricultural practices and address the challenges posed by climate change.
“India’s agriculture sector is at a crossroads, grappling with the dual challenge of ensuring food security while adapting to the impacts of climate change,” said Vivek Sen, Director at CPI India. “This report highlights actionable pathways to mobilise finance that supports sustainable agricultural practices, unlocks innovation, and fosters resilience. Collaborative efforts across stakeholders are essential to meet the growing food demand and achieve long-term sustainability.”
The report reveals critical insights into sustainable finance flows within the agriculture sector. It showed that the annual financial flows to sustainable agriculture averaged INR 22,393 billion (USD 301 billion) during FY 2020-22. Also, private finance accounted for 67% of total flows, with commercial financial institutions leading disbursements. Additionally, domestic sources dominated the landscape, contributing 99.5% of financial flows, while international sources made up only 0.5%.
The report outlines a four-pillar framework to strengthen financial flows for sustainable agriculture in India. It advocates for the creation of a Unified Sustainable Agriculture Taxonomy to standardise agricultural practices and align them with India’s climate finance taxonomy. Enhancing Monitoring and Reporting Systems is also emphasised to address data gaps and improve transparency for better decision-making. Additionally, the framework calls for boosting and diversifying financial flows by leveraging innovative tools, blended finance models, and risk mitigation mechanisms to attract greater investment. Finally, it highlights the importance of capacity building to equip stakeholders with the knowledge and resources necessary to adopt and implement sustainable practices effectively.
By addressing these recommendations, the report aims to inspire collaborative efforts between public and private stakeholders, fostering a transition toward sustainable agriculture. Public-private partnerships and intergovernmental initiatives are expected to play a key role in addressing the sector’s challenges and unlocking its potential.
