India May See 20Bn $ FDI In Climate-Tech

India may see up to $20 billion worth of investments in climatetech sector by 2030, said Enzia Ventures, a new-age, mid-market venture capital firm focused on healthcare, education and environment. Co-founder and partner Namita Dalmia said Indian entrepreneurs, over the next decade, would lead the way and build new products for the global market.

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What Has Been Said:

Patrick Brothers, co-founder & co-CEO, HolonIQ in a statement said,  “Climatetech is by far the fastest growing impact space in India. Despite economic and investment headwinds, we are seeing strong momentum and conviction from public and private investors.” “India has emerged with several global leaders in impact sectors, disrupting other markets from the Americas, Europe and throughout Southeast Asia,” he added.

Need Of The Hour:

India needs USD 20 billion (about RS 1.53 lakh crore) worth of investments each year to achieve its climate targets and fund its green transition, according to a report. The white paper by Ficci and Trilegal highlights that the country needs a large budget allocation, international finance from bilateral and multilateral sources and green private investments.

Reforms In Power Sector:

The report also spotlights reforms in the power sector for encouraging environmental, social and governance-led investment in India’s climate transition. Focussing on redefining corporate citizenship — the road to sustainability, the report details how corporates can contribute to the sustainability agenda, non-financial metrics and management of environmental, social and governance (ESG) risks. As regulators actively incorporate ESG and sustainability factors into the legal framework, the ways in which companies operate will change, it added.

India’s Position & Future Prospects:

As the third largest global emitter of greenhouse gases, it is estimated that climate change will potentially push over 132 million people globally toward extreme poverty by 2030. Ranking 7th on the Global Climate Risk 2021, climate change will lead to at least 40 per cent of India’s population living with water scarcity by 2050, while 35 million people could face annual coastal flooding. With melting ice caps, a decrease in agricultural productivity and erratic climatic patterns, it is eminent that disruptive innovations and technology are required to respond rapidly and creatively across different sectors.

India ranks at the ninth spot globally for climate tech investment, with the country’s climate tech firms receiving $ 1 Bn in venture capital funding between 2016 and 2021. Over the past five years, 120 climate tech startups raised over 200 funding rounds from 272 unique investors in India. Sustainability is becoming an indispensable checkpoint for investors in the climate-tech industry and across all sectors. According to a report, around 50 per cent of companies will have Environmental, Social, and Governance (ESG) among the top five business priority areas by 2025 to promote sustainability.

Innovation In Agriculture:

India is the global agricultural powerhouse, with 60 per cent of the population working in this industry. Revolutionary startups are emerging in the agri-tech space with potential growth of 25 per cent by 2025 to bridge the gap in this highly unorganized sector. The technology could play a pivotal role in supporting the rural population and meeting the country’s needs in terms of production. Some of the startups to watch are Poshn, Jai Kisan and AgriGator. Disruptive food-tech networks have also seen immense growth with alt-protein and alternatives such as plant-based meat. Stellapps, Numer8, Aquaconnect, Livestoc, and DGV are the startups developing solutions to make lending to livestock farmers easier through agri-financing ventures.

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