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India to prioritise adaptation as global funding falls short: Economic Survey

India increased its adaptation expenditures from 3.7% to 5.6% of GDP between 2016 and 2022, however strong adaptation strategy is needed to safeguard vulnerable communities and ecosystems, as per survey.

India needs to prioritise building climate resilience to safeguard its fast-growing economy, as global financial support for climate action in developing nations continues to diminish, according to the pre-Budget report presented in Parliament. This report is particularly significant as India, ranked the seventh most vulnerable country to climate change, gears up for COP30 in 2025, where nations will submit updated Nationally Determined Contributions (NDCs) under the Paris Agreement.

Viral Thakker, Partner and Leader – Sustainability & Climate, Deloitte South Asia, said “The Economic Survey 2025 rightly points out the need for a region-specific adaptation strategy. This is a pragmatic approach as climate risks vary across the various regions of the country, and a one-size-fits-all approach won’t work for us.”

He adds, “Scaling up climate investments through budget allocations, green finance, and public-private partnerships will be crucial for India to achieve its climate goals and as the survey suggests, prioritising investments in building resilient infrastructure will be key for sustained economic growth”.

The report warns that the ongoing funding shortfall may necessitate a revision of India’s climate targets. According to the country’s Initial Adaptation Communication submitted to the UNFCCC in December 2023, India’s adaptation-related expenditure surged to 5.6% of GDP in FY22, up from 3.7% in FY16.

Criticising the outcome of COP29 in Baku in November 2024, the report noted that the $300 billion annual mobilisation target by 2035 is far from the $5.1-6.8 trillion estimated to be needed by 2030. It emphasised the reluctance of wealthy developed countries to shoulder their fair share of responsibility for reducing emissions and addressing the climate impacts faced by vulnerable populations in the developing world.

The report also pointed out that developed countries are not meeting their NDCs, with a shortfall of about 38%. Despite being one of the lowest per-capita greenhouse gas emitters globally, India faces considerable challenges in scaling up renewable energy, especially in energy storage and sourcing critical minerals.

India has committed to achieving net-zero emissions by 2070 and aims to become a developed nation by 2047. The report stressed the importance of region-specific adaptation strategies, given India’s diverse geography and agro-climatic conditions. It also called for increased investments in energy storage, climate-resilient agriculture, and carbon capture technologies.

In addition, the pre-Budget document highlighted the potential of India’s LiFE Mission to encourage environmentally friendly lifestyle changes and proposed incorporating environmental awareness into educational curricula to foster sustainability from an early age.