As the climate crisis intensifies, carbon markets are steadily becoming a cornerstone of global decarbonization. With a price being assigned to carbon emissions, there is a gentle push to companies to invest in cleaner technologies and fund projects that reduce or remove greenhouse gases. When it comes to India’s carbon market, the country is already the second-largest issuer of voluntary carbon credits globally, accounting for over 17% of total issuance between 2010 and 2022. The country could become a central player in both compliance-based trading systems and voluntary offsets under Article 6 of the Paris Agreement, thanks to multiple opportunities in forestry, agriculture, clean energy, and waste management.
India is already ahead of countries like Kenya and Brazil in terms of total carbon credit issuance, with over 278 million credits issued between 2010 and 2022. Its diversified sectoral base and upcoming national carbon trading scheme position it to scale faster and more broadly than many emerging peers.
The Scale of India’s Carbon Credit Opportunity
India has already issued over 278 million carbon credits between 2010 and 2022. The global voluntary carbon market was valued at $2 billion in 2021 and was projected to expand to $50 billion by 2030. With India’s resources in the picture, it can scale this faster. In fact, analysts estimate that India’s carbon credit market could grow to ₹4.1 lakh crore (~$49.4 billion) by 2030, with a CAGR of 43%, driven by domestic policy reforms, corporate net-zero goals, and rising international demand for verified carbon offsets.
Photo by Anne Nygård on Unsplash
New Regulations Driving Growth in India's Carbon Credit Market
A series of important policy moves is what is driving India to build a strong regulatory foundation for carbon trading. Starting with the Energy Conservation (Amendment) Act of 2022, this has officially given the government the authority to create a Carbon Credit Trading Scheme (CCTS). The scheme allows businesses to earn, buy, and sell carbon credits based on how much they can reduce their emissions.
In February 2024, the Bureau of Energy Efficiency (BEE) expanded this scheme to cover not just mandatory compliance credits, but also voluntary offsets. This means companies can now earn credits for going beyond regulatory requirements. This adds flexibility and incentive to cut emissions.
In April 2025, the government also approved new carbon credit methodologies for a wide range of sectors—including high emission industries such as energy, manufacturing, agriculture, waste, and forestry. With this structure in place, the CCTS is expected to officially launch in 2026, creating a national carbon trading platform. Early estimates suggest that carbon prices in this market could start at around $10 per tonne of CO₂ equivalent (tCO₂e).
Challenges Ahead
While India’s carbon credit market has strong potential, a few key challenges still need to be addressed:
Regulatory Gaps: The absence of a single, unified framework for ensuring the quality of carbon credits leads to gaps in credibility. This makes it harder to guarantee that all credits are real, reliable, and environmentally effective.
High Verification Costs: Verifying carbon reduction projects, especially for smaller businesses, can be expensive and technically complex. Many promising projects get left behind due to a lack of resources or expertise to meet current verification standards.
Lack of Clarity on Standards: For carbon credit buyers and investors to trust a credit, it must meet global standards for additionality, permanence, and no double counting. In India, clearer rules in these areas are still evolving, which can slow down trust and investment.
Addressing these gaps is essential if India wants to build a high-integrity, globally trusted carbon market that attracts long-term capital and drives real climate action.
How Fitsol Can Help?
At Fitsol, a number one decarbonization partner, we are helping Indian businesses take a leadership position in the emerging carbon credit market by providing end-to-end support across the value chain. Our Measurement, Reporting, and Verification (MRV) systems are being deployed to capture Scope 1, 2, and 3 emissions with precision. Our team also facilitates access to carbon registries and supports organizations through the carbon verification process, including preparation for the upcoming Carbon Credit Trading Scheme (CCTS). By generating market-ready emissions reports and connecting clients with both domestic and international buyers, Fitsol transforms decarbonization initiatives into credible, high-quality carbon assets—ready for compliance and global trade.
India stands at a crossroads at this point. However, with thoughtful policy, transparent verification, and strategic partnerships, it can lead the future carbon credit market. For businesses involved in forestry, agriculture, renewable resources, or clean fuels, now is the time to scale responsibly and let India shape the next wave of global decarbonization.