Policy update
Saachi Saxena
Background
India’s updated Nationally Determined Contribution (NDC) for 2031–2035 sets out next phase of climate action under the Paris Agreement, building on earlier commitments while balancing economic growth, energy security and climate resilience. The Union Cabinet approved the updated NDC on 25 March 2026, and India subsequently submitted it to the United Nations Framework Convention on Climate Change (UNFCCC). The updated framework strengthens three measurable mitigation targets covering emissions intensity, non-fossil electricity capacity and carbon sinks, alongside broader commitments on adaptation, sustainable lifestyles, climate resilience and inclusive development (Press Information Bureau [PIB], 2026; United Nations Framework Convention on Climate Change [UNFCCC], 2026).
India’s progress under its earlier NDC provides an important foundation for these renewed commitments. The country reduced its GDP emissions intensity by 36% between 2005 and 2020, against its earlier target of a 45% reduction by 2030. It also achieved 52.57% non-fossil fuel-based installed electricity capacity by February 2026, surpassing its earlier target of 50% for 2030 ahead of schedule. These achievements demonstrate progress towards India’s climate goals and establish a foundation for the more ambitious targets set for 2031–2035 (PIB, 2026; UNFCCC, 2026).
India aims to:
- reduce the emissions intensity of its gross domestic product (GDP) by 47% from the 2005 level
- raise the share of non-fossil fuel sources in cumulative installed electricity capacity to 60%
- Expand the carbon sink through forest and tree cover by creating an additional carbon sink of 3.5–4.0 billion tonnes of carbon dioxide equivalent by 2035, relative to the 2005 baseline (PIB, 2026).
These commitments address three important aspects of climate action: making economic growth less emissions-intensive, changing the composition of electricity capacity and strengthening the role of forests and trees in absorbing carbon. The updated NDC aims to establish a carbon sink of 3.5 – 4.0 billion tonnes of CO₂ equivalent through forest and tree cover by 2035, measured against the 2005 baseline. This raises the ambition of the earlier commitment to create an additional carbon sink of 2.5 – 3.0 billion tonnes by 2030 (PIB, 2026; UNFCCC, 2026).
The updated commitments build on the progress reported under earlier NDCs. Emissions intensity fell by 36% between 2005 and 2020, while non-fossil fuel sources accounted for 52.57% of installed electricity capacity by February 2026, surpassing the earlier target of 50% for 2030 ahead of schedule. The government also reported that an additional carbon sink of 2.29 billion tonnes of CO₂ equivalent had been created between 2005 and 2021 (PIB, 2026). While these figures indicate progress, each target presents a different challenge. These figures establish the starting point for the next phase, although progress against one target does not automatically translate into equivalent progress across the others.
The challenge now is to translate these commitments into tangible results. This will require sustained investment, suitable infrastructure, cleaner industrial processes and effective coordination between central and state governments. For India, the task is not just to meet its climate targets, but to do so while supporting economic growth and meeting rising energy needs. India’s 2026 NDC provides the framework for this next phase, but its effectiveness will depend on how national targets translate into measurable sectoral outcomes.
Functioning
India’s updated NDC sets out three measurable targets and five broader commitments to bring climate action into development planning and governance. It reflects the outcomes of the first Global Stocktake under the Paris Agreement and the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC). The framework recognises that India must strengthen its climate efforts while accounting for its development needs and national priorities (Press Information Bureau [PIB], 2026; United Nations Framework Convention on Climate Change [UNFCCC], 2026).
The first target is to reduce emissions intensity, which measures greenhouse gas emissions relative to gross domestic product (GDP), by 47% from the 2005 level by 2035. This does not mean that total emissions must fall by the same percentage. The aim is to reduce the emissions generated for every unit of economic output. For a growing economy like India, as production, infrastructure and energy demand expand, improving the efficiency of resource use becomes essential to reducing the emissions associated with growth.
The second target is to raise the share of non-fossil fuel sources in cumulative installed electricity capacity to 60% by 2035. Achieving this will require continued expansion of renewable and other non-fossil energy sources, alongside supporting infrastructure such as battery storage and green energy corridors. Initiatives such as the National Green Hydrogen Mission, PM Surya Ghar Muft Bijli Yojana and PM-KUSUM also contribute to the broader policy framework for clean energy development (PIB, 2026).
However, installed capacity alone does not indicate how much electricity is actually generated from non-fossil sources. According to BloombergNEF (2026), non-fossil sources supplied approximately one-third of India’s electricity demand during the first seven months of 2026, while coal continued to provide the majority of electricity. This difference highlights the gap between capacity expansion and actual electricity supply.
The third target focuses on expanding India’s carbon sink through forest and tree cover to 3.5 – 4.0 billion tonnes of CO₂ equivalent by 2035, relative to the 2005 baseline (PIB, 2026). Meeting this commitment will require more than increasing tree cover. The long-term survival of plantations, forest health and the ability of ecosystems to store carbon will also be significant. This makes forest conservation and restoration important for land management and rural livelihoods.
Beyond these three targets, the NDC includes five qualitative commitments covering sustainable lifestyles, climate-friendly development, adaptation, resilience and a just and inclusive transition. It also identifies priorities across industrial energy efficiency, transport, buildings, agriculture, water management, urban development and vulnerable ecosystems, including the Himalayas (UNFCCC, 2026). These commitments broaden the scope of climate action beyond emissions reduction alone.
Implementation will build on the National Action Plan on Climate Change (NAPCC), its nine national missions and State Action Plans on Climate Change (SAPCCs), alongside existing central and state government programmes (PIB, 2026). This makes coordination across levels of government particularly important. Translating national targets into results will require climate objectives to be reflected in sectoral policies, public spending and investment decisions, with responsibilities clearly defined across the institutions involved.
Performance
India’s progress under its earlier climate commitments provides a useful starting point for assessing the targets set for 2031–2035. The challenge ahead is to build on these achievements and ensure that progress is reflected in actual changes across the economy.
According to the government, India’s emissions intensity declined by 36% between 2005 and 2020, while non-fossil fuel sources accounted for 52.57% of installed electricity capacity by February 2026 (Press Information Bureau [PIB], 2026). Although India has surpassed its earlier target for non-fossil installed capacity ahead of schedule, the reduction in emissions intensity should not be interpreted as a corresponding decline in absolute emissions. Emissions intensity measures greenhouse gas emissions relative to GDP, meaning it can fall even when total emissions continue to rise, provided economic output grows faster than emissions. Assessing the next phase of climate action will therefore require examining both emissions relative to economic output and changes in total emissions.
The scale of investment required is another dimension. BloombergNEF’s India Transition Factbook 2026 reports that investors committed $72 billion to India’s energy transition in 2025, equivalent to around 1.7% of GDP. The report also estimates that the wind and solar sectors will require $123 – 163 billion in capital by 2030 (BloombergNEF, 2026). These figures indicate the scale of investment associated with the transition, but they represent different measures: the $72 billion figure covers energy-transition investment, while the larger estimate concerns the projected capital requirements of wind and solar.
The headline investment figure does not, by itself, establish a complete breakdown between public and private finance or identify how much additional funding will be required specifically to meet the updated NDC targets. This distinction is important when assessing whether existing investment flows will be sufficient to support the infrastructure and technological changes needed by 2035.
The electricity sector illustrates this distinction. According to BloombergNEF (2026), non-fossil technologies accounted for 80% of new power generation capacity added to the grid over the preceding decade. During the first seven months of 2026, these sources supplied one-third of India’s electricity demand, while coal continued to provide the majority of electricity. This difference between installed capacity and actual generation is important when assessing the 2035 target. Expanding non-fossil capacity must be accompanied by improvements in transmission, storage and grid management if it is to translate into a larger contribution to electricity supply.
The sectoral distribution of emissions makes industrial decarbonisation particularly significant. WRI report on India’s NDC Targets and Milestones for Key Sectors identifies the energy and industry grouping, which includes electricity supply, industrial energy use, industrial processes and transport, as responsible for over 82% of India’s emissions (Golechha et al., 2026). Within this grouping, electricity production, iron and steel manufacturing, cement manufacturing and road transport account for a substantial share of emissions. The report highlights several measures to address these sources, including stricter green product standards, capital subsidies for low-emission technologies, energy-efficiency mechanisms such as the Perform, Achieve and Trade (PAT) scheme, and the Carbon Credit Trading Scheme (CCTS).
It also identifies green-skilling programmes and business models that support industrial growth alongside emissions reduction as important considerations (Golechha et al., 2026). These priorities connect India’s national climate targets with the practical changes required in electricity generation, heavy industry and transport. Progress will depend on implementing these measures while accounting for rising energy demand, investment requirements and the capacity of smaller enterprises to adopt cleaner technologies.
Taken together, these developments suggest that India’s next phase of climate action must move beyond meeting individual targets. The more important test is whether these achievements lead to sustained reductions in emissions intensity, a cleaner electricity supply and greater investment in low-carbon production. The focus must now shift from expanding capacity to ensuring that the transition delivers measurable economic and environmental outcomes.
Impact
The economic implications of India’s updated NDC extend beyond emissions reduction. Its implementation could influence investment, industrial competitiveness, energy security, employment and public spending. The economic gains associated with achieving NDC targets for 2031–2035, will depend on the pace of implementation, the allocation of investment and the ability of industries and workers to adapt to the transition.
Reducing emissions intensity will require firms to use energy and other productive resources more efficiently. Investment in energy-efficient equipment, cleaner production methods and lower-carbon energy could help businesses manage energy costs and adapt to changing environmental requirements. These are potential benefits rather than established outcomes of the updated NDC. Their realisation will depend on the cost of adopting cleaner technologies, the availability of suitable finance and the extent to which efficiency improves per output.
The transition could also reduce India’s dependence on imported fossil fuels. BloombergNEF (2026) estimates that energy imports could decline from 5.3% of GDP in 2025 to 3.1% in 2035 under its economics-led transition scenario, even without additional supportive policies. This is a modelled projection rather than an observed outcome or a guaranteed consequence of the NDC but it illustrates the potential economic value of expanding domestic clean energy.
Investment in renewable energy, storage, transmission and cleaner industrial processes could also support domestic manufacturing and employment. These sectors create demand for equipment, technical services and specialised skills. WRI identifies green skilling and innovative business models as important considerations for industrial decarbonisation (Golechha et al., 2026).
The distribution of these gains is also one dimension to consider. Large renewable energy projects can create concerns around land use and the interests of local communities. WRI discussed community-owned renewable energy models that could allow residents to hold shares in projects or benefit from access to electricity, while recognising possible implications for investment and scalability (Golechha et al., 2026). Such approaches could help broaden the benefits of clean energy investment, provided they remain financially viable and suited to local conditions.
Adaptation is an equally important dimension. Climate-resilient agriculture, efficient water use, heat action plans, disaster preparedness and resilient infrastructure can help protect livelihoods and reduce disruptions to economic activity. The government identifies these measures, alongside support for vulnerable coastal areas and Himalayan ecosystems, as part of its broader climate framework (PIB, 2026).
Ultimately, the value of the NDC will depend on whether its targets translate into measurable improvements in productivity, energy security, employment and climate resilience. The projections cited above indicate possible benefits, but they should not be interpreted as outcomes already achieved or attributed directly to the updated commitments. Evaluating the transition will require evidence of actual investment deployment, changes in fossil-fuel imports, employment generated and improvements in resilience. A successful transition must encourage cleaner production and strengthen energy security while ensuring that the costs of adjustment do not fall disproportionately on vulnerable households, workers and smaller businesses.
Emerging Issues
One of the main challenges for India is ensuring that the expansion of non-fossil electricity capacity translates into actual emissions reductions. Despite non-fossil sources accounting for more than half of installed electricity capacity, coal continues to supply most of the country’s electricity. Greater renewable capacity must therefore be supported by reliable transmission networks, storage and systems that can manage fluctuations in generation. Without these investments, the growth of installed capacity may not lead to equivalent progress in decarbonisation (BloombergNEF, 2026).
Financing is another aspect; given the scale of investment required for India’s energy transition. BloombergNEF (2026) estimates that wind and solar will require $123 – 163 billion in capital by 2030. Mobilising this investment may be constrained by high borrowing costs, uncertainty around project returns and the difficulty of securing long-term capital for infrastructure with substantial upfront costs. WRI India identifies concessional borrowing, viability gap funding and greater policy certainty as possible measures to encourage private investment in grid-related infrastructure (Golechha et al., 2026).
The ability to manage transition costs will also vary across industries and regions. Energy-intensive businesses may face significant expenses in adopting cleaner technologies, while smaller enterprises may struggle to access finance and the skills required for this shift. Renewable energy projects can create additional concerns around land use and local communities. If these social costs are not adequately addressed, the transition could deepen existing inequalities and make implementation more difficult.
Another aspect is measuring progress consistently. Emissions intensity, installed electricity capacity and carbon sinks capture different dimensions of climate action. Progress towards one target does not necessarily indicate that the others are on track. Carbon sink estimates must reflect actual carbon storage, while adaptation programmes need indicators that show whether vulnerability has declined and resilience has improved. Clear and measurable indicators are therefore essential to assess the effectiveness of both the quantitative targets and the broader commitments under the NDC.
Finally, mitigation should not be a trade off to adaptation. India’s priorities include heat action plans, early-warning systems, climate-resilient infrastructure, sustainable agriculture and Himalayan ecosystem protection (PIB, 2026). Integrating these measures into state and local development planning, with measurable outcomes, is essential to protecting livelihoods and strengthening climate resilience.
Way Forward
India’s next phase of climate policy should focus on how effectively its commitments are implemented and how efficiently public and private investment is used. Meeting the 2031 – 2035 targets will require clearer accountability, better coordination and greater attention to outcomes across sectors.
First, strengthen monitoring and accountability by coordinating NDC implementation across central ministries and state governments. Regular reporting should track emissions, non-fossil electricity generation, infrastructure and carbon sinks, supported by consistent indicators and independent verification.
Second, investment should extend beyond renewable capacity to transmission, storage and grid management. Policy certainty is essential to attract private investment and support long-term planning (Golechha et al., 2026).
Third, support industrial competitiveness through concessional finance, energy audits and access to cleaner technologies, particularly for smaller firms. Progress should be assessed through improvements in energy efficiency and emissions performance (Golechha et al., 2026).
Fourth, renewable energy projects should involve local communities through transparent land-use decisions, employment opportunities and access to reliable electricity. Adaptation programmes should link state climate plans with local risks, budgets and measurable outcomes. Evaluation should focus on protecting livelihoods, reducing climate-related disruptions and ensuring long-term ecosystem health.
Finally, climate finance should be integrated with development planning. WRI India’s participatory modelling approach highlights the links between economic growth, sectoral emissions, public finance and technology choices, helping policymakers identify trade offs and allocate resources more effectively (Golechha et al., 2026).
Conclusion
India’s updated 2026 NDC sets out its climate priorities for 2031 – 2035 through three measurable targets: reducing GDP emissions intensity by 47%, raising the share of non-fossil sources in installed electricity capacity to 60%, and expanding the carbon sink to 3.5 – 4.0 billion tonnes of CO₂ equivalent. These commitments build on earlier progress while setting new expectations for the next phase of climate action.
Meeting these targets will require more than expanding renewable energy capacity or announcing new initiatives. India will need to improve energy efficiency, mobilise investment, strengthen infrastructure and ensure that climate policies translate into measurable results. At the same time, the transition must account for differences in sectoral capabilities, regional needs and the costs faced by businesses and communities.
Ultimately, the success of the NDC will depend on how effectively climate commitments are integrated into India’s economic decisions. By linking emissions reduction with productive investment, resilient development and accountable implementation, India can pursue its climate objectives while addressing its broader development needs and working towards its long-term goal of net-zero emissions by 2070.
References
BloombergNEF. (2026, October 13). India transition factbook 2026. BloombergNEF. https://about.bnef.com/insights/clean-energy/india-transition-factbook-2026/
Golechha, A., Cholayil, N., Kumble, S., Yadav, P., Bhushan, S., Kaur, T., Nair, V., Mittal, V., Bajpai, A., Mondal, S., & Hingne, A. (2026). India’s NDC targets and milestones for key sectors: Proceedings from participatory modelling analysis workshops. WRI India. https://wri-india.org/sites/default/files/2026-03/India%E2%80%99s%20NDC%20Targets%20and%20Milestones.pdf
Press Information Bureau. (2026, March 25). Cabinet approves India’s Nationally Determined Contribution (2031–2035) to be communicated to the United Nations Framework Convention on Climate Change. Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2245209®=3&lang=1
Prime Minister’s Office. (2026, March 25). Cabinet approves India’s Nationally Determined Contribution (2031–2035) to be communicated to the United Nations Framework Convention on Climate Change. Government of India. https://www.pmindia.gov.in/en/news_updates/cabinet-approves-indias-nationally-determined-contribution-2031-2035-to-be-communicated-to-the-united-nations-framework-convention-on-climate-change/
United Nations Framework Convention on Climate Change. (2026). India NDC (2031–2035). https://unfccc.int/sites/default/files/2026-04/INDIA%20NDC%202031-35.pdf
About the Contributor
Saachi Saxena is an undergraduate student pursuing B.A. (Hons.) Economics at Gargi College, University of Delhi. Her research interests include climate economics, public policy, sustainable development, healthcare economics, and development policy. She has actively contributed to policy research and social impact initiatives and is passionate about evidence-based policymaking for inclusive and resilient development.
Reviewers: Khushi & Gargi Bisht
Acknowledgements
The author is grateful to IMPRI – Impact and Policy Research Institute for providing the opportunity to prepare this policy update. The author sincerely acknowledges the guidance, valuable feedback, and constructive suggestions received during the review process, which significantly strengthened the quality and analytical depth of this article.
Disclaimer
The views and opinions expressed in this policy update are those of the author and do not necessarily reflect the official position of IMPRI or any affiliated institution. While every effort has been made to ensure the accuracy of the information and data presented, readers are encouraged to verify facts independently before relying on them for any decision-making purpose.
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