Policies for mitigating macro-climatic risks in India 

Panel at Mumbai Climate Week 

Speakers 

The panel brought together senior voices from across India’s financial and policy landscape, including: 

• Saket Kumar, Head of the Sustainable Finance Division, Reserve Bank of India 

• Sanjeev Rohilla, Chief General Manager for Climate Action and Sustainability, NABARD 

• Suranjali Tandon, Associate Professor at NIPFP and Visiting Senior Fellow at CETEx 

• Janak Raj, Senior Fellow at CSEP and former Head of the RBI’s Monetary Policy Division 

The session was moderated by Arunima Sharan, Policy Analyst at CETEx, with introductory remarks delivered by Saumya Malhotra, Policy Fellow at CETEx. 

Session Overview 

The discussion addressed a central question: what must financial markets, public finances, and monetary policy prioritise to achieve India’s twin ambitions of becoming a developed nation (Viksit Bharat) by 2047, while also meeting its 2070 Net Zero commitment? 

Panellists explored the structural, regulatory, and institutional changes needed to align India’s financial architecture with both its development and climate goals. 

Objectives 

This panel set out to explore the macroeconomic implications of climate change and the low-carbon transition, and how these dynamics intersect with monetary and fiscal policy. 

While climate-related risks to financial systems—such as credit, market, and operational risks—are increasingly recognised, their broader implications for macroeconomic stability remain less well understood. The discussion aimed to address this gap by examining how climate risks affect inflation, employment, exchange rates, and public finances, particularly in the Indian context. 

Drawing on global research and policy experience, the session focused on identifying key evidence gaps and practical policy responses. It also highlighted the role of central banks, finance ministries, regulators, and governments in integrating climate risks into economic policymaking, with a view to strengthening long-term resilience and supporting sustainable growth. 

Key Insights 

A central theme was the importance of country-specific policy frameworks in scaling adaptation finance. While policy development takes time, panellists emphasised that frameworks must be grounded in India’s economic and institutional context, rather than directly imported from international models. There was also strong consensus that markets must play a more active role in financing climate action, particularly adaptation, which remains underfunded relative to mitigation. 

From a central banking perspective, the discussion highlighted the need for greater data granularity, improved modelling, and standardised approaches to capturing climate risk across the full banking system, including non-banking financial companies (NBFCs). Regulation alone is insufficient; it must be paired with meaningful capacity building across the financial ecosystem. Financial inclusion was also identified as critical, ensuring that climate finance reaches communities most exposed to climate risks. 

Panellists outlined several priorities for meeting India’s twin goals. The formalisation of a green taxonomy was identified as an essential foundation for directing capital effectively towards sustainable activities. Similarly, pricing emissions was seen as necessary to ensure environmental costs are reflected in economic decision-making. 

On public finance, panellists called for enabling state governments to borrow for adaptation as a proportion of state GDP, providing greater fiscal space to respond to climate vulnerabilities. Strengthening the private corporate debt market was also highlighted as key to mobilising private capital at scale. 

Finally, two institutional proposals drew particular attention: the establishment of a Green Development Finance Institution (DFI) to coordinate and channel finance more effectively, and the development of a unified digital marketplace for climate finance to connect borrowers and investors, improving access and accelerating the digitalisation of the sector. 

This event was held as part of Mumbai Climate Week