Building a Stronger Indian Carbon Market

As India moves towards its ambitious climate and decarbonisation targets, a robust Indian Carbon Market (ICM) is being developed to accelerate and support the transition towards a low-carbon economy.

The framework aims to establish a reliable national carbon credit trading platform that can recognise, incentivise and assign value to additional efforts made by organisations to reduce Greenhouse Gas (GHG) emissions. It will encourage industries and other entities to adopt cleaner technologies, improve efficiency and undertake meaningful decarbonisation initiatives.

The Indian Carbon Market Framework is built around two key mechanisms:

1. Compliance Mechanism
Focused on reducing emissions from energy-intensive and industrial sectors by establishing defined emission-reduction requirements.

2. Offset Mechanism
Designed to encourage voluntary GHG reduction initiatives by entities that are not covered under the compliance mechanism, thereby creating additional opportunities for climate-positive action.

Together, these mechanisms provide a structured approach to carbon reduction, market-based incentives and economy-wide decarbonisation, supporting India’s long-term climate goals.