India Carbon Credit Market Size, Share, Trends and Forecast by Type, Project Type, End Use Industry, and Region, 2026-2034

India Carbon Credit Market Overview:

The India carbon credit market size reached USD 33,685.37 Million in 2025. The market is projected to reach USD 4,05,472.04 Million by 2034, exhibiting a growth rate (CAGR) of 31.84% during 2026-2034. The market is driven by the establishment of a robust regulatory framework through the carbon credit Trading Scheme, increasing corporate commitments to Net Zero targets, and the expansion of voluntary carbon markets through nature-based and community-driven projects. Government approval of multiple voluntary crediting methodologies and the transition of major energy-intensive industries to compliance mechanisms are also expanding the India carbon credit market share.

India Carbon Credit Market Trends:

Government-Led Regulatory Framework Institutionalizes India's Carbon Market

The Indian government is establishing comprehensive institutional infrastructure to operationalize the country's carbon market through the Carbon Credit Trading Scheme. In July 2024, the Bureau of Energy Efficiency adopted detailed regulations for the compliance carbon market, implementing an intensity-based baseline-and-credit system that assigns mandatory greenhouse gas emissions intensity targets to obligated entities. The framework establishes a structured approach where entities exceeding their targets must surrender Carbon Credit Certificates representing one tonne of carbon dioxide equivalent, while entities achieving better-than-target performance earn tradable credits. The National Steering Committee for Indian Carbon Market oversees the entire framework, with the Ministry of Power, Ministry of Environment Forest and Climate Change, and Bureau of Energy Efficiency jointly managing operations. The compliance mechanism initially covers nine energy-intensive industrial sectors including aluminum, chloralkali processes, cement, fertilizer, iron and steel, pulp and paper, petrochemicals, petroleum refining, and textiles, representing significant portions of India's industrial emissions. The government's methodical approach includes establishing verification protocols requiring covered entities to submit verified greenhouse gas emissions reports within four months of each compliance year ending, with accredited carbon verification agencies ensuring adherence to emissions intensity targets. This regulatory certainty provides businesses with clear compliance pathways and investment frameworks, facilitating strategic planning for decarbonization initiatives. The transition from the existing Perform, Achieve and Trade scheme to the Carbon Credit Trading Scheme begins in 2025, with baseline emissions levels determined using 2023-2024 data, enabling full operationalization by fiscal year 2026.

Corporate Net-Zero Commitments Accelerating Compliance Readiness Across Energy-Intensive Sectors

Major Indian corporations across multiple sectors are pledging ambitious Net Zero targets, driving substantial investments in carbon credit mechanisms and decarbonization technologies. Companies including Tata Steel, Reliance Industries, Mahindra, Infosys, and NTPC have established aggressive emissions reduction timelines, recognizing carbon markets as critical instruments for achieving climate commitments while maintaining competitive positioning. Eight methods for producing voluntary carbon credits were approved by the Ministry of Power in March 2025. These methods included mangrove afforestation projects, green hydrogen production, renewable energy, and industrial energy efficiency. This gave businesses a variety of options for offset generation and emissions reduction. The current Perform, Achieve, and Trade program can be gradually replaced by a comprehensive credit-based system that complies with worldwide standards thanks to this regulatory breakthrough. The India carbon credit market growth is particularly pronounced in energy-intensive sectors where companies face escalating pressure from both regulatory requirements and stakeholder expectations regarding environmental performance. Industrial entities are proactively preparing for the compliance market launch scheduled for fiscal year 2026 by establishing internal carbon accounting systems, conducting emissions inventories, and identifying cost-effective abatement opportunities. The integration of carbon pricing into corporate strategy is transforming investment decisions, with businesses increasingly evaluating projects based on their carbon intensity and potential for generating tradable credits. This corporate readiness extends beyond large enterprises, as industry associations and sectoral bodies are facilitating knowledge sharing and capacity building to ensure widespread participation when mandatory compliance begins.

Voluntary Carbon Market Expansion Through Nature-Based and Community-Driven Projects

India's voluntary carbon market is experiencing substantial growth through increased participation in nature-based solutions and community development projects that deliver environmental benefits alongside social co-benefits. The number of registered projects under leading carbon crediting programs Verra and Gold Standard increased from 921 in January 2022 to 1,451 by June 2023, reflecting growing recognition of carbon finance as a mechanism for sustainable development. In November 2024, the National Dairy Development Board, collaborating with EKI Energy Services and Sustain Plus Energy Foundation, enabled India's first-ever carbon credit payments to dairy farmers from Rajasthan and Assam under its manure management program. Household-level biogas plants that turn dairy waste into clean cooking fuel and produce tradable carbon credits provided financial benefits to over 1,000 dairy farmers from nine locations in seven states, illustrating how carbon markets can give rural communities additional revenue streams. This pioneering initiative showcases the potential for scaling community-based carbon projects across India's agricultural sector, where millions of smallholder farmers could participate in carbon markets through aggregated project structures. The Environment Protection Act's October 2023 announcement of the Green Credit Programme, which encourages the planting of trees on degraded forest area and grants digital credits to participants who maintain plants for extended periods of time, further strengthens the voluntary market. Projects focusing on renewable energy deployment, sustainable agriculture practices, and ecosystem restoration are attracting both domestic and international buyers seeking high-quality credits with verifiable environmental integrity and measurable community impact.

India Carbon Credit Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional levels for 2026-2034. Our report has categorized the market based on type, project type, and end use industry.

Type Insights:

• Compliance
• Voluntary

The report has provided a detailed breakup and analysis of the market based on the type. This includes compliance and voluntary.

Project Type Insights:

• Avoidance/Reduction Projects
• Removal/Sequestration Projects
  • Nature-based
  • Technology-based

A detailed breakup and analysis of the market based on the project type have also been provided in the report. This includes avoidance/reduction projects and removal/sequestration projects (nature-based and technology-based).

End Use Industry Insights:

• Power
• Energy
• Aviation
• Transportation
• Buildings
• Industrial
• Others

The report has provided a detailed breakup and analysis of the market based on the end use Industry. This includes power, energy, aviation, transportation, buildings, industrial, and others.

Regional Insights:

• North India
• South India
• East India
• West India

The report has also provided a comprehensive analysis of all the major regional markets, which include North India, South India, East India, and West India.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

India Carbon Credit Market News:

• November 2024: In November 2024, the National Dairy Development Board, in collaboration with EKI Energy Services and Sustain Plus Energy Foundation, enabled India's first-ever carbon credit payments to dairy farmers from Rajasthan and Assam under its manure management program. About 1,000 dairy farmers from nine locations across seven states received payments for household-level biogas plants that generate carbon credits through sustainable manure management practices. The milestone event took place during NDDB's Diamond Jubilee celebrations in Anand, Gujarat, where Union Home Minister Shri Amit Shah distributed the carbon credit payments to the farmers.
• October 2024: Greenam Energy created India's first floating solar installation for captive use, which EKI Energy Services registered under the Voluntary Carbon Market. Situated on water reservoirs in Tamil Nadu, the 24.7 megawatt floating solar photovoltaic plant is the first floating solar project in the world to be accredited under the Verified Carbon Standard, which is overseen by Verra. The project is anticipated to provide clean energy and reduce carbon dioxide emissions by about 38,376 tons per year.
• November 2024: To extend its carbon credit trading and sustainability services throughout North America, EKI Energy Services and the US-based Aviation Resource Group International signed a strategic representation agreement. By strengthening its activities in the North American market, this alliance hopes to further establish EKI's position in the global carbon market and facilitate improved service delivery for sustainability consulting and carbon credit trading.

India Carbon Credit Market Report Coverage:

Key Questions Answered in This Report:

• How has the India carbon credit market performed so far and how will it perform in the coming years?
• What is the breakup of the India carbon credit market on the basis of type?
• What is the breakup of the India carbon credit market on the basis of project type?
• What is the breakup of the India carbon credit market on the basis of end use industry?
• What is the breakup of the India carbon credit market on the basis of region?
• What are the various stages in the value chain of the India carbon credit market?
• What are the key driving factors and challenges in the India carbon credit market?
• What is the structure of the India carbon credit market and who are the key players?
• What is the degree of competition in the India carbon credit market?

Key Benefits for Stakeholders:

• IMARC's industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India carbon credit market from 2020-2034.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the India carbon credit market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India carbon credit industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.