Green Finance and AI in India: A Synergistic Approach to Sustainable Development and Climate Resilience

Abstract

India's ambition to achieve net-zero emissions by 2070 represents a defining commitment to combating climate change while fostering economic growth. Green finance has emerged as a cornerstone of this transition, catalyzing investments in renewable energy, sustainable agriculture, and eco-friendly infrastructure. This paper examines India's green finance landscape, highlighting transformative policies such as the National Action Plan on Climate Change (NAPCC) and initiatives like green bonds and public-private partnerships. It explores how advanced technologies, including artificial intelligence and blockchain, are revolutionizing decision-making, enhancing transparency, and mitigating risks associated with green investments. Despite these strides, challenges persist, including an annual funding gap of over INR 8,30,000 crores, limited private sector engagement in socially critical areas, and the looming threat of greenwashing. The disproportionate focus on clean energy investments often sidelines climate adaptation and social equity, raising concerns about holistic sustainability. Furthermore, the lack of standardized green metrics complicates evaluation and undermines investor confidence. This study underscores the need for innovative financial instruments, equitable resource allocation, and robust governance to bridge these gaps. By fostering inclusive partnerships and aligning investments with the urgency of environmental and developmental goals, India can position itself as a global leader in sustainable finance. This research offers critical insights into navigating the complexities of green finance and provides a roadmap for a balanced, technology-driven, and socially inclusive approach to achieving sustainability.