SUMMARY
As the demand for sustainable solutions grows, so does the need for green finance
Initially, most funding went to OEMs, but now investors are looking at areas like EV financing, charging infrastructure, and battery tech
The Indian government has recognised the importance of fostering a conducive environment for green startups
The Indian startup ecosystem is booming and buzzing with innovation and energy, with it growing awareness of the need for environmental responsibility.
From renewable energy to waste management and sustainable agriculture to eco-friendly transportation, Indian startups are leveraging technology and creativity to develop solutions that mitigate environmental harm and contribute to the country’s economic growth.
This shift is not just driven by ethical considerations but also by the realisation that sustainability can be a major driver of innovation and economic growth.
Green Startups & Green Finance
India’s startup landscape has seen a significant rise in green startups addressing various aspects of sustainability. As the demand for sustainable solutions grows, so does the need for green finance.
These startups seek funding from sources that prioritise environmental, social, and governance (ESG) criteria, including impact investors, sustainable investment funds, and green bonds.
This access to capital is crucial for accelerating the growth of the green economy. By aligning their financing with their sustainability goals, green startups can accelerate their growth, expand their impact, and contribute to the transition towards a more sustainable economy.
Sustainable Transportation
Sustainable transportation startups in India are revolutionising the way people and goods move while minimising environmental impact. These startups are at the forefront of developing electric vehicles (EVs), building charging infrastructure, and promoting alternative modes of transportation such as cycling and shared mobility services.
Since 2015, Indian EV startups received $2.6 Bn in investments. Initially, most funding went to OEMs, but now investors are looking at areas like EV financing, charging infrastructure, and battery tech.
From electric cars and scooters to electric bicycles and rickshaws, sustainable transportation startups are providing consumers with affordable and eco-friendly alternatives to traditional modes of transportation.
Shared mobility platforms are making EVs more accessible through rentals and subscription services. Additionally, companies are tackling the crucial infrastructure gap by building robust charging networks across cities. Through technological innovation, partnerships with government agencies, and collaborations with industry stakeholders, these startups are driving the transition towards a more sustainable transportation system in India, paving the way for cleaner air and a greener future.
Sustainable Agriculture
Agriculture is another sector undergoing a transformation towards sustainability. The Indian agriculture sector faces challenges like water scarcity and soil degradation.
Agritech startups are offering solutions that promote sustainable farming practices. Startups are connecting farmers directly to consumers, reducing food waste and improving market access and are developing technologies for precision agriculture, which helps farmers use resources more efficiently.
Startups are leveraging technology to promote organic farming practices, reduce chemical inputs, and optimise water usage. Smart irrigation systems, precision agriculture technologies, and farm-to-fork supply chain solutions are empowering farmers to adopt sustainable practices while improving productivity and profitability.
Challenges And Opportunities
While the momentum towards a greener India is encouraging, startups in the sustainability space face several challenges. These include funding constraints, regulatory hurdles, market penetration barriers, and the need for scalable business models. However, these challenges also present opportunities for collaboration, innovation, and growth.
Investors are increasingly recognising the potential of green startups and are willing to support impactful ventures that align with environmental and social objectives. Moreover, partnerships with corporations, NGOs, and research institutions can provide startups with access to resources, expertise, and market networks, enabling them to scale their operations and maximise their impact.
Government Support And Initiatives
The Indian government has recognised the importance of fostering a conducive environment for green startups. Initiatives such as the Startup India program and schemes promoting clean energy and sustainable development are providing financial support, incentives, and regulatory frameworks to encourage innovation in the green sector.
Schemes like the Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) and the National Electric Mobility Mission Plan 2020 directly incentivise the adoption and production of EVs, creating a market for green startups in this sector.
In the fiscal year 2023-24, the government spent INR 4,807 Cr under the FAME India scheme. For the fiscal year 2024-25, INR 2,671 Cr has been allocated under the FAME scheme.
Furthermore, the government is promoting green finance through initiatives like the Green Bonds framework and the NABARD Green Refinance Scheme, making capital more accessible for sustainable businesses.
Collaborations between government agencies, academic institutions, and industry stakeholders are fostering research and development in sustainable technologies and promoting knowledge exchange and capacity building.
Conclusion
India’s startup ecosystem is at the forefront of driving innovation and change towards a greener and more sustainable future. With a diverse range of startups addressing environmental challenges across various sectors, the country is poised to become a global leader in sustainable development.
By nurturing entrepreneurship, fostering collaboration, and leveraging technology and innovation, India can unlock the full potential of its startup ecosystem to build a cleaner, healthier, and more prosperous nation for generations to come.
With a collective commitment to sustainability, India’s startups are not only shaping the country’s future but also inspiring positive change on a global scale.
