Real Estate Financing for Green and Sustainable Buildings in India

In the present context of climate change, rising energy costs, and government regulations that push for eco-friendly practices, expanding green real estate in India demands robust financial mechanisms. This paper examines existing certification systems, financial instruments, and regulatory frameworks governing green real estate. Through policy analysis, it identifies key challenges including technical and institutional barriers, declining investor confidence due to awareness and transparency gaps, low market demand limited by insufficient incentives, and disproportionate investment in energy over real estate. To address these pitfalls, this study recommends actionable steps to diversify green investments, strengthen financing infrastructure, and improve policy enforcement such as the development of a standardized green taxonomy, a national green credit program, and a regulated green secondary market to improve liquidity. The paper also calls for stronger coordination through public-private partnerships and multi-level governance, alongside technical capacity-building initiatives for key stakeholders. Through a comparative analysis of state-wise incentives promoting green building construction in India, this study sets the stage for further research to evaluate the effectiveness of local green policies. Finally, it outlines the future scope of green real estate in India through the lens of behavioural economics.