India's Climate Tech Sector Attracts $12.8 Billion in Cumulative Funding Through 2025

India's climate technology sector has drawn $12.8 billion in cumulative funding across 1,583 companies, with annual investment rising from $315 million in 2020 to $2.6 billion in 2025, according to a Tracxn report released on June 4. Energy security concerns linked to India's 85 per cent import dependence for crude oil are emerging as a key driver alongside climate goals.

Renewable Energy Tech is the largest segment by cumulative funding at $1.5 billion, with Inox Clean Energy's $344 million Series D round and an earlier $70 million Series C among the largest transactions. Erisha E Mobility raised $1 billion in a Series D round in 2025. In 2026, climate tech companies have raised around $791 million across 74 rounds, but 66 per cent of that was concentrated in just five late-stage deals, indicating growing investor preference for proven business models over early-stage exploration.

Policy support is maturing alongside private capital. The PM E-DRIVE scheme — worth Rs 10,900 crore and extended until 2028 — supports EV adoption and charging infrastructure. The Carbon Credit Trading Scheme is scheduled to become operational in October 2026, establishing a compliance carbon market covering approximately 490 industrial units across nine sectors. The Rs 7,280 crore Rare Earth Permanent Magnets scheme aims to reduce dependence on imported materials for clean energy supply chains.

Beyond renewable energy, diversification within India's climate tech ecosystem is growing. Solid Waste Management Tech has attracted $477 million, Energy Efficiency Tech $352 million, Air Pollution Management Tech $237 million, and Water and Wastewater Management Tech $208 million — together more than $1.2 billion. British International Investment, IFC, FMO, and Finnfund are among the active development finance institutions, reflecting sustained international confidence in India's energy transition and the role of institutional capital in bridging early-stage risk.

Key figure — $2.6 billion annual climate tech funding in India in 2025