Abstract

India is at a crucial stage in transitioning to a low-carbon economy with the launch of the
Carbon Credit Trading Scheme (CCTS) under the Energy Conservation (Amendment) Act,
2022—the country’s first comprehensive framework for carbon pricing and emission trading.
This study examines the evolution, structure, and performance potential of India’s carbon credit
market using secondary data and policy analysis. Valued at USD 4.01 billion in 2023 and
projected to surpass USD 49 billion by 2030, the market could drive green investment,
renewable energy adoption, and revenue generation through carbon farming, afforestation, and
industrial efficiency. The CCTS is poised to support India’s Paris Agreement and 2070 netzero
goals. However, challenges such as fragmented institutions, weak enforcement, limited
MRV (Measurement, Reporting, and Verification) capacity, and low demand may hinder
progress. Strengthening policy coherence, digital MRV systems, and MSME capacity is vital.
With transparent governance and global alignment under Article 6, India can emerge as a
regional carbon-market leader.