Reserve Bank of India (RBI) Governor Shaktikanta Das announced trading of Sovereign Green Bonds at the International Financial Services Centre (IFSC) within Gujarat’s GIFT City is expected to commence by October. This initiative is part of a broader strategy to attract foreign investments to Bharat’s green bonds market.
The IFSC at GIFT City offers a regulatory and tax-friendly environment designed to appeal to both domestic and international financial institutions. The RBI’s decision to include Sovereign Green Bonds in this centre aims to enhance global participation in India’s green financing efforts.
Das highlighted that discussions are ongoing to finalise the operational details for allowing investments in these green bonds. The move follows an earlier announcement in April, when the RBI revealed plans to permit investment and trading of Sovereign Green Bonds at IFSC, Gandhinagar.
Currently, foreign portfolio investors (FPIs) registered with the Securities and Exchange Board of India (SEBI) can invest in green bonds through various investment routes for government securities. The RBI’s new policy aims to broaden the scope for non-resident investors in the green bonds market.
Although there is no set annual target for green bond issuance, the Indian Government had indicated in March that Rs 12,000 crore of the total Rs 7.50 lakh crore gross borrowings planned for the first half of FY25 would come from Sovereign Green Bonds. This aligns with the Union Budget’s objective of reducing carbon intensity and promoting sustainable development through public sector projects.
In the recent Budget, the government adjusted its gross market borrowing target for the financial year ending March 2025, reducing it by Rs 12,000 crore to Rs 14.01 lakh crore. The issuance of Sovereign Green Bonds is seen as a key component in the country’s efforts to finance environmentally sustainable projects and attract global investment.
