Financing Adaptation in India: Recent Developments and Emerging Pathways

Adaptation is emerging as a critical component of India’s national and subnational planning, with progress made on related policy and implementation. The updated Nationally Determined Contribution (NDC) and the 2025-26 Economic Survey of India both emphasize adaptation, and the upcoming National Adaptation Plan (NAP) aims to bring existing efforts together under a cohesive strategy to integrate adaptation into plans and policies across economic growth and development. Updated State Action Plans on Climate Change (SAPCCs) also place greater emphasis on enabling factors for subnational implementation. This report captures the evolving climate risk and policy context for adaptation, presents state-level adaptation finance requirements as outlined in SAPCCs, and explores avenues to increase adaptation finance.

India faces substantial and geographically diverse climate risks that threaten its development gains (Adil et al. 2025). The country acknowledges that the most effective adaptation strategies tap opportunities arising from development requirements while also addressing climate vulnerabilities (MoF 2026). The Initial Adaptation Communication estimates that approximately INR 56.68 trillion (USD 684.6 billion) will be required for adaptation under a business-as-usual scenario until 2030. However, increasing climate-induced pressures and developmental needs could raise requirements to INR 72 trillion (USD 854.16 billion) (MoEFCC 2023). Identifying and investing in adaptation early can reduce future economic and fiscal pressures, as well as losses and damages.

While these estimates describe future finance requirements, available data on current flows show where adaptation finance is coming from. Domestic public finance remains the backbone of India’s adaptation response, accounting for 94.5% of tracked flows in fiscal year (FY) 2023/24 (CPI 2026). Given the scale and diversity of the country’s adaptation needs, strengthening public finance must be complemented by efforts to diversify sources, including, where appropriate, mobilizing private capital.

Analysis of national and state-level adaptation planning and financing highlights India’s evolving policy architecture and need for more targeted approaches to scale adaptation finance.