On World Environment Day, my guest on India Tech Report: In Conversation was Vishal Kataria, a member of the investment team at Ankur Capital, and co-author of the Mumbai-based early-stage VC firm’s recent climate tech report titled Transforming India’s Core Sectors.
Here are my top 10 takeaways from that conversation.
1. Climate tech investment remains robust in India
Despite a broader slowdown in venture capital, climate tech investments in India have consistently exceeded $1 billion annually over the past three or four years. This resilience highlights the sector’s growing maturity and the increasing recognition that climate solutions are not just about emissions reduction but also about long-term economic competitiveness.
2. Disproportionate investment across sectors
There is a notable mismatch between sectors’ emissions contributions and the investments they attract. For instance, transportation receives nearly half of all climate tech venture funding, despite contributing only 10–15 percent of emissions. This is largely because electric mobility offers immediate economic benefits, such as lower total cost of ownership, making it attractive for investors.
3. Industrial decarbonization severely lags emissions
Only about 4 percent of climate investments in India have gone into industrial decarbonization, even though industry accounts for roughly a quarter of emissions. High abatement costs (typically, $ cost per metric tonne of CO2 equivalent reduced or eliminated) and the need for deep technological innovation — especially in sectors like cement and steel — have limited investor interest. Significant R&D breakthroughs are required to make these solutions cost-effective and scalable.
4. Deep tech and climate tech are intertwined
Many impactful climate interventions require deep science and hardware innovation, not just software. However, scaling such solutions is capital-intensive, and India’s funding ecosystem is still developing the depth needed to support late-stage growth for these ventures. The landscape is changing, with more researchers focusing on commercialization and entrepreneurship.
5. India’s unique strength in carbon removal
India is emerging as a global leader in natural carbon removal technologies such as enhanced rock weathering and biochar. These solutions leverage India’s abundant volcanic rock and agricultural waste, offering scalable, scientifically validated methods for permanent carbon sequestration. Startups in this space are gaining international recognition and funding.
6. Renewable energy deployment is accelerating
India’s rapid adoption of solar and wind energy has been a standout success, with ambitious targets set for 2030. However, as renewables become a larger share of the grid, challenges around storage and grid management will require next-generation technologies, such as long-duration batteries and decentralized energy resources.
7. Platform technologies drive energy transition
Startups such as Vimano, an Ankur portfolio venture, are developing core technology platforms — such as advanced ion-conductive membranes — that can serve multiple applications across energy storage, hydrogen production, and industrial processes. These platforms are critical for enabling the next wave of energy transition solutions and are attractive for their scalability and versatility.
8. Diversity and maturity in climate tech investments
Investment is becoming less concentrated, with significant funding now flowing into a range of sectors, including food and agriculture, energy, and carbon management. This diversification signals a maturing ecosystem where both early-stage and growth-stage companies are scaling up across various climate verticals.
9. Context-specific solutions for food and agriculture
India’s climate tech innovation in food and agriculture must be tailored to local conditions, such as smallholder farms and unique supply chain challenges. While global trends like autonomous farming are promising, Indian solutions will likely differ in approach, focusing on cost-effectiveness and adaptability to fragmented landholdings.
10. Future priorities: advanced materials and earth intelligence
Looking ahead, areas that Ankur Capital sees as promising include advanced materials (e.g., graphene, ceramics, new construction materials) and Earth and climate intelligence (including satellite-based data and AI-driven analytics). These areas are expected to underpin breakthroughs in energy, industry, and sustainable agriculture over the next few years.
