CII flags $1 tn green funding gap, seeks new finance body in Budget 2026

Industry body calls for a GIFT City-based intermediary to scale green capital, recycling and fast-track clearances

The Confederation of Indian Industry (CII) has asked the Centre to set up a dedicated green finance institution (GFI) in the upcoming Union Budget. This, it said, would help address India’s widening green investment deficit, estimated at nearly $1 trillion over the next 10-15 years and about $10 trillion by 2070.

 

Current green finance flows meet only a fourth of this requirement, the industry body said in a statement.

 

CII said the proposed institution should be structured as an intermediary rather than a balance sheet lender. It should be seeded by multilateral development banks, sovereign funds and philanthropies, involving no direct fiscal outgo. It has recommended setting up the GFI in GIFT City to leverage regulatory flexibility and attract global capital.

 

The institution would provide concessional finance, credit guarantees, equity support and securitisation of small green assets to lower project costs across renewable energy, mobility, buildings and industrial decarbonisation.

 

The industry body also proposed the creation of a green tech expo fund to help Indian clean-tech firms showcase innovation in global sustainability and technology platforms. This would aid in tie-ups with international investors and buyers.

 

On the circular economy, CII warned that India’s high import dependence on critical minerals such as lithium, cobalt and nickel, without a structured recycling framework, poses risks to emerging sectors, including electric vehicles (EVs), defence electronics and renewable energy manufacturing.

 

It recommended mandatory recycling and urban mining targets for batteries and electronics, alongside strict certification to curb exports of unprocessed scrap.

 

Fiscal incentives and faster clearances are required to build domestic refining capacity and strategic stockpiles, it said.

 

To scale recycling, CII suggested developing 15 circular economy parks in the next three years and expanding to 45 parks in five years across key waste streams such as e-waste, plastics, tyres and batteries.

 

A national programme for large, multi-material recycling parks near major urban centres would help address fragmentation and low recovery rates in current recycling chains.

 

For environmental compliance, CII has proposed a unified environmental and climate clearance authority (ECCA) with fully digital, integrated processes across central and state agencies. This would include risk-based fast-track approvals for green projects, automatic clearances within fixed timelines, and expedited pathways for proposals meeting standards on emissions, renewable energy use and zero liquid discharge.

 

CII also urged the government to launch a national digitalisation of built environment initiative to mandate energy code compliance for large buildings.

 

“As India moves closer to its goal of becoming a $5 trillion economy, advancing a green economy is no longer a choice but a strategic necessity. This transition is vital not only for meeting climate goals but also for shaping India’s long-term growth, competitiveness, and global standing,” said Chandrajit Banerjee, director general, CII.

Green wishlist

• The CII said the proposed institution should be structured as an intermediary rather than a balance sheet lender
• The industrial body has recommended locating the GFI in GIFT City to leverage regulatory flexibility and attract global capital
• It also proposed the creation of a Green Tech Expo Fund to help Indian clean-tech firms innovate in sustainability
• To boost recycling, CII suggested developing 15 circular economy parks in the next three years