Sustainable Finance Flows to India’s Agriculture Sector

The report finds that sustainable agriculture finance in India averaged INR 22,393 billion annually between FY 2020-21 and FY 2021-22, with a heavy reliance on domestic private finance (67%) and commercial financial institutions. While public funding remains significant, international flows are negligible at 0.5%. The study highlights a concentration of funds in farming practices and storage/markets, while critical areas like research, natural capital, and alternative supply chains are severely underfunded. It recommends the creation of a sustainable agriculture taxonomy, improved granular data reporting, the diversification of financial instruments beyond debt, and expanded capacity building to foster a more resilient agricultural ecosystem.

• 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 dominated the landscape, accounting for 67% of total flows, averaging INR 15,054 billion (USD 202 billion) and increasing by 11.4% over the tracked period.
• Commercial financial institutions provided the vast majority of private finance (99.4%), largely driven by Reserve Bank of India (RBI) priority-sector lending guidelines requiring 18% of adjusted net bank credit to be allocated to agriculture and allied activities.
• 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 specific activities: agriculture/farming activities received 61% of funds, upstream activities 22%, and downstream activities 17%.
• Within the agricultural value chain, several critical sectors are severely underfunded, including alternative supply chains (0.02%), natural capital (0.1%), and farmer organizations and cooperatives (0.2%).
• Debt-based balance sheet financing is the primary instrument, accounting for 66.8% of flows, while equity instruments (0.3%) and grants (0.03%) remain minimal.
• India represents a significant global hub for agricultural private equity and venture capital (PE/VC), accounting for approximately 21.76% of the global USD 17 billion total in FY 2021-22.

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} }