A STUDY ON MACROECONOMIC FACTORS INFLUENCING GREEN BONDS IN INDIA

Green bonds have emerged as a critical financial instrument to fund environmentally sustainable projects, aligning with global efforts to combat climate change and promote green infrastructure. This study examines the macroeconomic factors influencing green bond issuance in India, focusing on key determinants such as GDP growth, inflation, interest rates, ESG scores, and bond ratings. By analysing sectoral trends in green finance, the study identifies clean transportation as the leading recipient of green bond investments, followed by renewable energy and waste & water management. The research employs a quantitative approach, utilizing regression and correlation analysis to assess the impact of macroeconomic variables on green bond issuance. The findings suggest that GDP growth has a positive influence, while inflation acts as a deterrent. ESG scores and credit ratings significantly affect investor confidence, with well-governed firms attracting higher investments. Despite regulatory advancements by SEBI and adherence to Green Bond Principles (GBP), challenges such as greenwashing risks, policy inconsistencies, and market volatility persist. The study concludes that green bonds hold immense potential to support India's transition toward a low carbon economy, macroeconomic stability is ensured. Encouraging standardization in ESG assessments, enhancing transparency, and incentivizing underfunded sectors like waste management can further accelerate the growth of green finance. The research contributes to the existing literature by providing country-specific insights into India’s green bond market and offering findings to enhance its effectiveness in sustainable financing. Keywords: Green bonds, Environmentally Sustainable Projects, India’s Green Bond Market, Sustainable Development Goals, Green Finance, ESG Scores, Macroeconomic factors, Climate change, GDP growth, Sustainable financing.