India’s new Paris Agreement pledge and a blueprint for sustainable development

Sustainable development requires a deliberate integration of economic growth and climate and environmental goals. Action on one drives outcomes on the other. India, wisely, is embracing this strategy, as demonstrated by its new Nationally Determined Contribution. This matters for the entire world, write Nicholas Stern and Shantanu Singh. 

Last week, in a world distracted by geopolitical conflict, India’s central government announced its Nationally Determined Contribution (NDC) under the Paris Agreement for 2031–35. The announcement was a reminder of the work required globally to focus attention on the severe climate and biodiversity crises facing humanity and rise to the challenge to combat both. It was also a moment where India demonstrated the kind of leadership necessary to enable sustainable development for all countries, developing and developed.

NDCs are the national-level mechanisms through which global ambition on climate change can be translated into action. But of course their importance goes far beyond the climate. A well-designed NDC is a calibrated map for sustainable growth and development. It sets the direction for energy systems, industrial strategy, public investment and regulatory frameworks in a way that can foster overall investment to tackle climate change, thereby driving growth, jobs and resilience.

Why is India’s NDC so important?

India’s updated NDC embodies the understanding of how climate action can drive growth. It sets three quantitative targets: a 47% reduction by 2035 in the emissions intensity of GDP – i.e. the amount of greenhouse gas emissions per unit of economic output; increasing non-fossil electricity capacity to 60%; and creating a cumulative carbon sink to absorb 3.5–4 billion tonnes of CO₂. The accompanying qualitative goals cover agricultural resilience, water security, health, sustainable lifestyles and technology development.

India’s development story matters to the world. Its GDP is projected to double from US$4 trillion today to US$10 trillion by 2035, with its population rising to 1.5 billion. The growth in population and industry will likely at least double electricity demand, from 1,407 to over 3,100 terawatt hours. Crucially, the majority of the urban infrastructure that will exist in India by 2047 – the centenary of independence – will be built between now and then. With the updated NDC, India is signalling that it is willing to avoid the mistakes made by developed countries in the past and shift towards a path of growth that is clean, modern and resilient. 

In the current global geopolitical context, while many policymakers might be inclined to a cautionary approach, there is a case for India to demonstrate greater ambition. The NDC targets should be seen as a conservative floor for what the country can achieve. With India’s clean energy sector demonstrating world-leading growth and deployment rates, the targets for non-fossil-fuel energy might be met by the end of the decade.

The current geopolitical climate also calls for greater ambition on securing India’s energy suppliers and reducing its dependence on the volatile fossil-fuel market: imports of fossil fuels represent around 5% of India’s GDP, a huge cost and a source of great vulnerability. The alignment of India’s security, geopolitical, development and environmental priorities make a strong case for greater ambition, particularly in the case of green energy and infrastructure.

Investment for climate and biodiversity

This is an opportunity for India to marshal its investment, innovation and vibrant youth to go further. Driven by a combination of sound policy and its entrepreneurial energy, it met its target of a 36% reduction in emissions intensity 11 years ahead of schedule. The same approach applied to electric buses, storage, grid technology and urban infrastructure can accelerate the transition across sectors, and produce solutions exportable to the wider developing world.

This is true also for India’s forests. According to the UN Food and Agricultural Organisation’s 2025 report, India’s forests absorb approximately 150 million tonnes of CO₂ annually, making India one of the top five global carbon sinks. The forests of the Western Ghats and Himalayan foothills are not only significant carbon stores but extraordinary repositories of biodiversity. India’s natural capital is crucial for social, political and macroeconomic stability. The ambition to create an additional sink of 2.5–3 billion tonnes of CO₂ can also be scaled up and linked more closely to India’s plans for climate adaptation and conservation, as well as opportunities in the bioeconomy.

Investment is the engine that will drive India’s growth and development as well as climate action. This is recognised in the NDC, explicitly noting the mobilisation of investment and its finance as a key goal. Translating the NDC’s vision into actual investment flows requires deliberate policy and regulatory action to create the conditions in which capital can move at scale. India can accelerate this by coordinating action across sectors and project pipelines that are ready for commercial financing. Mobilising India’s domestic capital markets, which are already well positioned to absorb local risk, can anchor investment and provide the confidence that draws in international partners. Innovations in finance, such as blended finance, can create instruments that support the flows of capital into the country.

Above all, continued improvements in the ease of doing business that remove avoidable sources of uncertainty are what can make India a destination for patient, productive investment. This means further developing transparent regulatory frameworks, robust contract enforcement and reliable protection of investor rights. The NDC provides the strategic direction; the investment climate will determine whether that direction is translated into deployed capital or remains aspirational.

Achieving Viksit Bharat – developed India

In planning for Viksit Bharat by 2047, India will need a systemic transformation of the economy and society it is building. This means a visible and tangible enhancement to quality of life, and an improved climate for business and investment. And it means the protection and enrichment of India’s precious natural resources and capital – its forests, rivers, soils and biodiversity – which are the foundation of its development.

India also holds the BRICS chair this year, further enhancing the opportunity from the NDC announcement to foster an agenda for sustainable and resilient growth. India can showcase a model that can be durable and equitable, driven by leadership from large developing countries. The growth story of this century will be written by those who act now, with purpose and at scale.