According to IMARC Group’s report, “India Carbon Credit Market Size, Share, Trends and Forecast by Type, Project Type, End-Use Industry, and Region, 2026–2034,” the study provides an in-depth evaluation of the industry, covering key market trends, share, growth potential, and regional performance across India.
India Advanced Building Materials Market – Highlights & Key Findings
- The India carbon credit market was valued at USD 33.68 Billion in 2025, highlighting the country’s growing focus on sustainability and emissions reduction.
- The market is projected to reach USD 405.47 Billion by 2034, indicating massive long-term potential driven by regulatory support and corporate climate commitments.
- The market is expected to grow at a robust CAGR of 31.84% from 2026 to 2034, making it one of the fastest-growing environmental markets in India.
- Government initiatives such as India’s carbon trading framework, net-zero targets, and renewable energy policies are accelerating market adoption.
- Increasing involvement from industries, MSMEs, and multinational corporations seeking carbon neutrality is boosting demand for carbon credits.
- Growth is supported by solar, wind, biomass, and afforestation projects, which are key sources of carbon credit generation in India.
- India is emerging as a major supplier of carbon credits to global markets, benefiting from cost-effective project development.
- The rapid expansion presents strong opportunities for investors, sustainability consultants, ESG firms, and clean-tech companies.
India Carbon Credit Market Trends:
The India Carbon Credit Market is rapidly evolving as organizations and government bodies are beginning to encourage structured approaches on emissions management and climate action. Especially, sectors like manufacturing, energy, infrastructure, and transportation are beginning to take carbon credit initiatives into account during their planning and sustainability processes. A number of companies are targeting activities that have corresponding verified carbon reductions, and are also purchasing credits related to activities including renewable energy, energy efficiency, waste-to-energy and nature-based solutions, such as afforestation. Growing interest in transparency and credibility has led buyers to focus on credits with strong monitoring, reporting, and verification (MRV) methodologies supporting their claims.
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Digital technologies are helping the market with traceability, project documentation, access to corporate buyers and project developers. There is a growing need from brands that want to protect themselves from reputational risks or compliance issues in the future, especially those who have targets mandated by ESG reporting frameworks. A rise in awareness amongst SMEs on carbon credit opportunities to improve competitiveness and attract responsible investment has also eased the transition. The India Carbon Credit Market is moving in the right direction towards more quality credits, better governance, and measurable climate impact. This presents a competitive opportunity for long-term sustainability leadership.
India Carbon Credit Market Growth Drivers:
The Indian carbon credit market has the potential for further growth as India scales up climate action ecosystem and leads low-carbon transitions across multiple sectors of the economy, supported by increased adoption of carbon management practices by corporates, higher levels of climate resilience and credible carbon emissions offset mechanisms. Key opportunity sectors include renewable energy generation, industrial energy efficiency, methane recovery, sustainable agriculture, and forest carbon project types that offer a clear environmental integrity and social impact. The market is also expected to be driven by growing confidence in the generation of verified credits, leading domestic companies and a wider mix of international buyers to engage in the purchase of high-quality offsets.
Associated growth potential is the integration of ESG frameworks, where carbon credits can support a responsible business model and help secure investments. This may grow because processes standardize and verify better and because projects appear transparent, which adds to the confidence within the market and its stability. India diversifies geographically and industrially, which presents opportunities for projects to reduce carbon in scalable ways that also benefit the environment and communities. As people become aware, invest in infrastructure, and participate more, the India Carbon Credit Market is positioned to grow sustainably through sustainable practices and climate responsibility well into the future.
India Carbon Credit Market Segmentation
- By Type, the India carbon credit market is segmented into Compliance and Voluntary, with the Voluntary segment dominating the market by accounting for 58.04% share in 2025.
- By Project Type, the India carbon credit market is segmented into Avoidance/Reduction Projects and Removal/Sequestration Projects (Nature-based and Technology-based), with Avoidance/Reduction Projects leading the market by accounting for 52.1% share in 2025.
- By End-Use Industry, the India carbon credit market is segmented into Power, Energy, Aviation, Transportation, Buildings, Industrial, and Others, with the Power segment representing the largest share at 20.05% in 2025.
- By Region, the India carbon credit market is segmented into North India, South India, East India, and West India, with North India leading the market by accounting for a 31% share in 2025.
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