Decoding India's Green Bond Ecosystem: Framework, Market Development, and Expansion

Abstract

Since the day the European Investment Bank issued the first "Green Bond" in 2007, the world has made significant progress. The next step was the approval from numerous financial institutions to utilize this strategy for obtaining funding to develop "green assets". Currently, there are numerous global finance institutions, nations, financial institutions, and non-banking financial companies (NBFCs) that are offering green bonds.As growth continued, it became necessary to establish rules, leading to the creation of international norms and the development of specific rules by Central bankers.The purpose of the issuance is good, but the concern is whether investors will receive competitive returns compared to other investment options and if the current growth in green bond subscriptions is sufficient to fund the capital needed for carbon neutrality by 2070.This paper attempts to examine all the previously mentioned factors regarding green bonds and also provides some recommendations to enhance this concept in India.