Climate Policy Initiative Launches Report on Sustainable Finance Flows to India’s Agriculture Sector

Climate Policy Initiative (CPI) has unveiled its latest report “Sustainable Finance Flows to India’s Agriculture Sector” that offers a comprehensive analysis of financial flows that can help transform India’s agriculture into a sustainable and climate-resilient sector.

The new report from Climate Policy Initiative provides a deep dive into the public and private finance sources, intermediaries, and end-use activities within India’s agriculture value chain during the 2020-21 and 2021-22 financial years. By mapping financial flows and identifying key opportunities, the report is a critical resource for policymakers, regulators, financial institutions, and private investors.

Speaking on the report’s significance, Vivek Sen, Director at CPI India, remarked, “India’s agriculture sector is at a crossroads, grappling with the dual challenge of ensuring food security while adapting to the impacts of climate change. This report highlights actionable pathways to mobilize finance that supports sustainable agricultural practices, unlocks innovation and fosters resilience. Collaborative efforts across stakeholders are essential to meet the growing food demand and achieve long-term sustainability.”

Key findings from the report include:

• Annual financial flows to sustainable agriculture averaged INR 22,393 billion (USD 301 billion) during FY 2020-22.
• Private finance accounted for 67% of total flows, with commercial financial institutions leading disbursements.
• Domestic sources dominated, representing 99.5% of financial flows, while international sources accounted for 0.5%.

The report recommends a four-pillar framework to enhance sustainable agriculture finance in India:

1. Establishing a Unified Sustainable Agriculture Taxonomy to standardize practices and align with India’s climate finance taxonomy.
2. Enhancing Monitoring and Reporting Systems to close data gaps and improve transparency.
3. Boosting and Diversifying Financial Flows through innovative tools, blended finance, and increased risk mitigation mechanisms.
4. Build Capacity to equip stakeholders with the knowledge and resources to adopt sustainable practices.

The findings and recommendations aim to inspire collaborative efforts across public-private partnerships and intergovernmental initiatives, addressing the sector’s growing challenges and opportunities.