New Delhi: The Confederation of Indian Industry (CII) has recommended that the government announce a Green Financial Institution (GFI) in the upcoming Union Budget for FY27 to mobilize large-scale low-cost capital for India’s green transition across renewable energy, clean mobility, green buildings and industrial decarbonisation. The green finance institution should be domiciled in GIFT City to take advantage of regulatory flexibility and attract foreign capital, the industry body said in a statement. The industry body noted that reaching net zero by 2070 requires nearly $10 trillion in total green investments, with $1 trillion expected to be invested over the next 10-15 years. However, current green finance flows cover only about 25% of this need, highlighting significant gaps in the availability of long-term, low-cost capital. Finance Minister Nirmala Sitharaman will present the Union Budget for the next fiscal year in Parliament on February 1, and energy transition is expected to be a key focus area for the government. “It can be structured as an intermediary (not a balance sheet lender) and structured by multilateral development banks, sovereign wealth funds and philanthropies, which does not entail any direct fiscal outlay from the government. It can provide soft loans, equity support, credit guarantees and securitization of small-scale green assets to reduce project financing costs,” CII said. Chandrajit Banerjee, CII Director General, said: “As India moves closer to its goal of becoming a $5 trillion economy, promoting a green economy is no longer a choice, but a strategic imperative. This transition is essential not only for achieving climate goals, but also for shaping India’s long-term growth, competitiveness and global standing.” He went on to say that a holistic approach to decarbonisation is a necessity where transition financing, circularity and a robust environmental, social and governance (ESG) reporting ecosystem are prioritised, in addition to the focus on renewable energy and green mobility. Green Technology Fund A Deloitte report published in July projected a requirement of $1.5 trillion in investment by 2030 across key areas to address the climate challenge at scale, through renewable energy, biofuels, decarbonisation and sustainable infrastructure. CII, in its budget recommendations, also asked the government to establish a ‘Green Tech Expo Fund’ to help globalize India’s green technology innovations. “The fund can support participation of Indian enterprises involved in green technology manufacturing, in global sustainability and technology exhibitions, facilitating collaboration with global investors, buyers and technology partners,” the statement said. Amidst high import dependency of critical minerals and the need for circularity and recycling, it has been proposed to mandate recycling and urban mining targets for lithium batteries and electronics, along with strict certification, to curb the export of unprocessed scrap. Urban mining is the process of recovering valuable materials from urban waste, such as discarded electronics, construction materials and consumer goods. Fiscal incentives and fast-track clearances can be facilitated to boost domestic refining capacity and strategic stockpiling of recovered critical minerals, he added. “There is a lack of scale and clustering in recycling value chains, leading to a dispersed network of small facilities struggling with poor economics, low recovery rates and weak incentives for the adoption of advanced technologies. Policy should support the development of 15 Circular Economy Parks (CEPs) over the next 3 years, extending to 5 years, with a stream, including a stream of plastics, tires and batteries. In addition, a national program could be launched to establishing large-scale multi-material recycling parks near major urban centres,” the CII statement said. Establishing such an institutional framework can create a robust recycling ecosystem, reduce dependence on virgin resources and drive technological innovation, it said. The Union government has already prepared a ₹ 1,500 crore incentive scheme for recovery of critical minerals. A recent statement from the Ministry of Mines said that a significant number of entities have so far registered on the portal designated for receiving applications.