Sustainable Finance Flows to India’s Agriculture Sector

This report by the Climate Policy Initiative analyzes financial flows to India's sustainable agriculture sector for FY 2020-21 and FY 2021-22. It employs a value-chain approach to map public and private funding across upstream, farming, and downstream activities, highlighting a heavy reliance on domestic commercial bank debt and government budgets, while noting a significant gap in international finance and diversified investment instruments.

• Annual financial flows to sustainable agriculture in India averaged INR 22,393 billion (USD 301 billion) for FY 2020-22, showing a slight decline of 1.1% from FY 2020-21 to FY 2021-22.
• Private finance is the dominant source of funding, accounting for 67% of total flows (averaging INR 15,054 billion or USD 202 billion), with commercial financial institutions providing 99.4% of these private funds.
• There is a stark disparity between domestic and international funding, with domestic sources representing 99.5% of flows (INR 22,289 billion) and international sources contributing only 0.5% (INR 105 billion).
• Public finance averaged INR 7,339 billion (USD 99 billion) annually, with union and state government budgets as the primary source, providing an average of INR 6,373 billion (USD 86 billion) per year.
• Financial flows are heavily concentrated in agriculture and farming activities (61%), specifically farm practices and cropping choices (86.7% of that segment), while other critical areas like electricity (0.1%) and natural capital (0.1%) receive negligible funding.
• Debt-based balance sheet financing is the primary instrument used, accounting for 66.8% of flows, followed by government budgetary expenditures at 28.5%. Equity and grants represent a very small fraction (0.3% and 0.03% respectively).
• India's agriculture sector is a major emitter, producing 18% of the country's gross greenhouse gas emissions, and faces significant climate risks, including predicted yield reductions for rainfed rice (20%) and wheat (19.3%) by 2050.
• The report recommends four pillars for improvement: creating a sustainable agriculture taxonomy, enhancing digital monitoring and reporting systems, diversifying financial flows into underrepresented sectors, and expanding capacity building for all stakeholders.

APA

Puri, P., Hooda, S., Khanna, N., & Sen, V. (2025). Sustainable Finance Flows to India’s Agriculture Sector. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/01/Sustainable-Agriculture-Finance-in-India.pdf

Chicago

Puri, Parag, Suryanshu Hooda, Neha Khanna, and Vivek Sen. Sustainable Finance Flows to India’s Agriculture Sector. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/01/Sustainable-Agriculture-Finance-in-India.pdf.

Wikipedia

{{cite report |last1=Puri |first1=Parag |last2=Hooda |first2=Suryanshu |last3=Khanna |first3=Neha |last4=Sen |first4=Vivek |title=Sustainable Finance Flows to India’s Agriculture Sector |publisher=Climate Policy Initiative |date=January 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/01/Sustainable-Agriculture-Finance-in-India.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{puri2025sustainable, author = {Puri, Parag and Hooda, Suryanshu and Khanna, Neha and Sen, Vivek}, title = {{Sustainable Finance Flows to India’s Agriculture Sector}}, institution = {Climate Policy Initiative}, year = {2025}, month = jan, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/01/Sustainable-Agriculture-Finance-in-India.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }