{"id":91009,"date":"2026-09-28T14:39:31","date_gmt":"2026-09-28T13:39:31","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&#038;p=91009"},"modified":"2026-09-28T14:39:32","modified_gmt":"2026-09-28T13:39:32","slug":"the-implications-of-niti-aayogs-net-zero-finance-report-for-india-a-tempered-ambition","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/the-implications-of-niti-aayogs-net-zero-finance-report-for-india-a-tempered-ambition\/","title":{"rendered":"The implications of NITI Aayog\u2019s net zero finance report for India: a tempered ambition"},"content":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p class=\"wp-block-paragraph\">The National Institution for Transforming India (known as NITI Aayog), in its 2026 report on India&rsquo;s net zero financing needs, estimates the nation requires US$22.7 trillion in cumulative investment by 2070 to achieve net zero emissions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This policy brief assesses the distance between that investment ambition and the domestic financial system&rsquo;s current capacity to deliver it. The authors suggest the NITI report&rsquo;s recommendation for the formation of a new dedicated financial institution focused on blended finance structuring deserves serious attention and note three emerging priority areas (i.e. power, transport and industry) for closing the net zero financing gap.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Main messages<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The report is the first of its kind to assess both the investment required for India&rsquo;s net zero transition and the capital that could be mobilised, estimating that reforms could unlock US$16.2 trillion by 2070. Commercial banks and non-banking financial companies (NBFCs) are projected to provide 42% of financing while institutional investors and corporations account for 36%. Although banks and NBFCs are expected to provide 83% of total debt financing, institutional investors are identified as the largest source of equity capital.<\/li>\n\n\n\n<li>India&rsquo;s corporate bond market, equivalent to around 16% of gross domestic product, remains shallow and dominated by financial institution issuers. Related work undertaken by NITI Aayog on deepening India&rsquo;s corporate bond market calls for strengthening regulatory frameworks, enhancing market infrastructure, facilitating issuance by mid-size firms and broadening investor participation.<\/li>\n\n\n\n<li>Of the US$16.2 trillion to be mobilised, NITI Aayog&rsquo;s analysis estimates that international finance flows would remain at 19%, broadly in line with current levels. This means a gap of almost US$6.5 trillion will also need to be met by international capital.<\/li>\n\n\n\n<li>The report&rsquo;s recommendation to establish a dedicated green finance institution and strengthen the enabling environment for blended finance deserves serious attention. Some broad priorities emerge from the report. The banking system could explore a gradual reduction of the Statutory Liquidity Ratio towards the regulatory limit of 18%, while institutional players such as insurance and pension funds could be encouraged to reduce their allocations to government securities without compromising the risk&ndash;return objectives of individual investors. Together, these reforms could unlock capital for green infrastructure<br>and help attract the international capital needed to close the remaining financing gap.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>DOI:<\/strong> <a class=\"link link--external\" rel=\"noopener\" href=\"https:\/\/doi.org\/10.21953\/researchonline.lse.ac.uk.00140338\" aria-describedby=\"link-description-new-window\" target=\"_blank\" title=\"\">10.21953\/researchonline.lse.ac.uk.00140338&#65279;<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" role=\"img\" aria-hidden=\"true\"><path d=\"M14.42 1.04L3.2.7a.8.8 0 00-.8.76v.1a.8.8 0 00.76.7l9.39.3L.93 14.16c-.3.3-.3.8 0 1.1l.09.08c.3.23.73.2 1.01-.07L13.65 3.65l.29 9.4a.8.8 0 00.8.76.79.79 0 00.77-.8L15.17 1.8a.82.82 0 00-.75-.76z\" fill=\"#2e3152\"><\/path><\/svg><\/a><\/p>\n\n","protected":false},"excerpt":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p>This policy brief assesses the distance between India&rsquo;s net zero by 2070 investment ambition and the domestic financial system&rsquo;s current capacity to deliver it.<\/p>\n\n","protected":false},"author":72,"featured_media":91015,"template":"","tags":[5368,1032,210,64,1279,5369,1139,1133,5370],"publication-type":[1682],"topic_area":[4689,4710,4711,4712],"class_list":["post-91009","publication","type-publication","status-publish","has-post-thumbnail","hentry","tag-corporate-bond-market","tag-green-finance","tag-india","tag-industry","tag-institutional-investors","tag-international-investment","tag-investment","tag-net-zero","tag-niti-aayog","publication-type-policy-publications","topic_area-financing-a-better-future","topic_area-public-finance","topic_area-banking-and-private-investors","topic_area-central-banks-and-other-financial-institutions"],"acf":{"exclude_from_sync":{"ref_value":"field_560538b0e7350","value":"0","type":false,"post_type":""},"show_translations_widget":{"ref_value":"field_6203d588c41e8","value":"0","type":false,"post_type":""},"downloads":{"ref_value":"field_52f16cc1a80f2","value":["https:\/\/www.lse.ac.uk\/granthaminstitute\/wp-content\/uploads\/2026\/09\/The-implications-of-NITI-Aayogs-net-zero-finance-report-for-India.pdf"],"type":"download","post_type":""},"rss_newsletter":{"ref_value":"field_54f5c2c1544d8","value":"","type":false,"post_type":""},"profile_link":{"ref_value":"field_52f164b5189e9","value":["sangeeth-raja","shantanu-srivastava","labanya-prakash-jena","venugopal-mothkoor"],"type":"relationship","post_type":"profile"},"spotlight":{"ref_value":"field_52f80896506d3","value":"","type":false,"post_type":""}},"yoast_head":"<!-- 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