StanChart Says Clarity on India’s Green Rules Will Boost Deals

The race to define India’s environmental regulations is becoming a critical factor in unlocking billions of dollars in green investment deals. Standard Chartered, one of Asia’s largest multinational banks, has positioned itself at the forefront of this transition, but its success hinges on regulatory clarity. “Clear rules on what constitutes a ‘green’ investment will be the catalyst for scaling deals,” a senior executive at the bank recently told DealBook.

StanChart’s Green Pivot: Ambition Meets Reality

Standard Chartered aims to generate over $1 billion in sustainable finance income by 2025, a target it nearly achieved in 2024 with $982 million in green and transition finance deals. The bank has already mobilized $121 billion in sustainable finance globally since 2021, with India a key focus. Its Transition Plan, which integrates climate considerations into all financing activities, sets a 29% reduction target for financed emissions in oil and gas by 2030—a science-based goal aligned with the Paris Agreement.

Yet, India’s regulatory environment remains a double-edged sword. While the country’s $2.4 billion National Green Hydrogen Mission and $4.3 billion renewable energy budget offer fertile ground for deals, ambiguities persist. “The lack of standardized metrics for green projects creates friction,” said a Mumbai-based analyst. “Is a coal plant with carbon capture technology ‘green’? Without clarity, banks tread cautiously.”

India’s Regulatory Tightrope

India’s push for 500 GW of non-fossil fuel capacity by 2030 is underpinned by aggressive policies:
- ESG Reporting Mandates: The Securities and Exchange Board of India (SEBI) now requires the top 1,000 listed firms to disclose carbon footprints and sustainability practices via the Business Responsibility and Sustainability Report (BRSR). This has forced companies to align with global standards, creating transparency for investors.
- Data Localization: The Digital Personal Data Protection Bill requires sensitive data to be stored locally, complicating cross-border operations for banks. Standard Chartered, like peers, has invested heavily in India-based data infrastructure to comply.

However, challenges loom:
- Preferential Market Access (PMA): A 20% price advantage for local vendors complicates global firms’ competitiveness unless they partner with Indian firms.
- Coal Reliance: Despite climate goals, coal still powers 70% of India’s electricity, creating regulatory tension for banks financing fossil fuels.

The Prize: Green Hydrogen and EVs

Standard Chartered sees its best opportunities in sectors with clear incentives:
1. Green Hydrogen: India’s target of 5 million metric tons of green hydrogen annually by 2030 could attract $2.4 billion in subsidies. The bank is already exploring financing electrolyzer manufacturing and export hubs.
2. Electric Vehicles (EVs): Production-linked incentives (PLIs) for EVs, backed by reduced customs duties on battery components, align with the bank’s $300 billion sustainable finance goal by 2030.

“India’s EV market could be worth $200 billion by 2030,” said the bank’s head of sustainable finance. “But without clarity on how to classify EV projects as green, we risk overexposure to regulatory risk.”

Risks: Data, Disputes, and Delays

• Legal Backlog: India’s judiciary resolves corporate disputes in 1.6 years on average—a vast improvement over pre-2016 timelines—but still lags behind Western systems.
• Land Rights: Unclear land titles remain a barrier to renewable energy projects, though urban areas like Delhi and Mumbai offer better certainty.

Conclusion: The Green Deal Depends on Rules

Standard Chartered’s success in India’s green market will depend on two factors: regulatory certainty and sector-specific clarity. With $982 million in sustainable finance already booked in 2024 and a $300 billion target by 2030, the bank is well-positioned—if India’s policymakers can bridge the gap between ambition and enforcement.

The stakes are high: India’s renewable energy sector could attract $1.3 trillion in cumulative investment by 2030, according to the International Energy Agency. For StanChart, the path to profit is clear—but the road to regulatory harmony is still under construction.

In the end, clarity on green rules isn’t just about compliance—it’s the difference between a $1 billion target and a $300 billion legacy.