Governing Green: An Analysis of India's Regulatory Architecture for Sustainable Finance

Green finance is a critical catalyst for a sustainable transition with the dual mandate of developing economically and reducing climate change. India, which has very ambitious Nationally Determined Contributions (NDCs) under the Paris Agreement and aims to reach Net Zero emissions by 2070, has made a strong emphasis on developing a strong green finance ecosystem. This paper describes the dynamic regulatory framework governing green finance in India. It applies a doctrinal and analytical approach to deconstruct the major legal and regulatory tools that are used to define this landscape. The article follows the path of development of the early principles to the complex, multi-dimensional systems that have been developed by the two key financial regulators in the country,namely the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI).The paper will concentrate on three critical spaces: the entire framework of Green Debt Securities (GDS) by the SEBI, with its highly important amendments in 2023, which made it mandatory to have third party verification and extended the taxonomy to include blue and yellow bonds; the landmark framework of Green Deposits by the RBI, which will move retail savings into green projects; and the strategic deployment of Sovereign Green Bonds by the Government of India to create a benchmark yield curve. The paper also examines how greenwashing can be combated by employing better disclosure systems, such as the Business Responsibility and Sustainability Reporting (BRSR) framework, to build trust among investors.The results show that although India has achieved a lot in building a progressive and strong regulatory environment, there is still a long way to go. They are the provision of consistency in defining what is meant by green projects, secondary market liquidity of green instruments, institutional capacity in verifying and reporting impact, and financing the transition of hard-to- abate sectors. The paper concludes by giving certain policy recommendations to address these barriers, saying the future of the Indian green finance market is in better enforcement of the regulations, innovative financial product development, and fair and equitable transition.