What India’s 2024 Budget Means for Climate Change and the Future of Food and Agriculture

India has released its annual Budget this week, with a climate finance taxonomy and spending on resilient crop varieties among the key takeaways for climate change and agriculture.

This week, Indian finance minister Nirmala Sitharaman presented the country’s annual Budget for a record seventh consecutive year. It was also the first Budget announced by India’s NDA coalition government, which was re-elected for a third straight term in June, led by the Bharatiya Janata Party (BJP).

Contrary to expectations, the BJP didn’t win an absolute majority on its own, let alone reach its predicted number of seats that would have given the right-wing party a supermajority in the party. After landslide victories in the previous two elections, that the BJP had to rely on coalition partners to form a government signalled a shift in the national sentiment.

India voted against religious persecution, segregation and nationalism, rejecting the polarised environment cultivated by the ruling party in the last decade. But another huge factor was largely in the background: climate change.

The six-week-long elections were held amid heatwaves in several parts of India, leading to record-high temperatures and dozens of deaths. Climate change was missing from candidates’ messaging, despite one of the biggest backlashes against the BJP’s tenure coming from farmers, a group even more adversely affected by the climate crisis.

The finance ministry this week suggested that India’s annual per capita emissions are a third of the global average – but these have also risen by 93% since 2001. Its climate target (or nationally determined contribution) has been deemed “highly insufficient” by the Climate Action Tracker, with current policies and action rated as “insufficient” too.

India is now the most populous country, and also the world’s third-largest polluter – it can’t afford to ignore climate change.

India ups climate investment, to create a climate taxonomy

In the Union Budget for the 2024-25 fiscal year, Sitharaman has allotted ₹3,265.53 crores ($390M) to the Ministry of Environment, Forest and Climate Change (MoEFCC), a 6% improvement on the ₹3,079.4 crores ($367.9M) set aside last year.

As part of its efforts to meet its climate goals, India will also develop a climate taxonomy to classify economic activities in line with green commitments and broader environmental goals. “We will develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation. This will support [the] achievement of the country’s climate commitments and green transition,” said Sitharaman.

According to the UN Environment Programme, taxonomies provide clear science-based definitions, help avoid greenwashing, and help identify eligible assets, activities or projects that are low-carbon, align with climate-friendly economic development, or are environmentally sustainable.

But while the move has been hailed by some, others have raised concerns about possible greenwashing. “India’s climate finance taxonomy could prove helpful and would be a move towards the ‘Paris alignment’ of finance in line with the goals of the Paris Agreement,” said Sehr Raheja, programme officer at think tank Centre for Science and Environment.

“Whether the tagging of activities improves finance for climate or brings in risks of greenwashing remains to be seen after it is released,” he added.

Aarti Khosla, director of consulting firm Climate Trends, said: “The budget lacks timelines for announcements on taxonomy, carbon pricing mechanisms and detailed strategies for mobilising climate finance for adaptation and mitigation efforts in vulnerable communities.”

Additionally, the Budget allocated ₹220 crores ($26M) for the National Mission for a Green India, a 37.5% hike from last year. The initiative aims to preserve forest cover and protect citizens from the impacts of the climate crisis.

Major wins for agriculture and smart proteins

One of the nine priorities of India’s latest Budget was productivity and resilience in agriculture, a sector that received ₹1.52 crores ($18.15B) for the next fiscal year.

Sitharaman announced that the Indian government will undertake a comprehensive review of research to develop climate-resilient seeds, and release 109 new high-yielding and climate-resilient varieties of 32 field and horticultural crops for farmers in 2024-25.

Meanwhile, in the next two years, 10 million farmers would be initiated into natural farming – which emphasises modern ecology, recycling, and on-farm resource optimisation – supported by certification and branding. This will be implemented through scientific institutions and rural councils, alongside the establishment of 10,000 need-based bio-input resource centres.

The finance minister further outlined plans to shift large-scale vegetable production closer to major consumption centres. “We will promote farmer producer organisations, coops and startups for vegetable supply chains, including for collection, storage, and marketing,” she said.

The government will also boost the production and marketing of crops like mustard, groundnut, sesame, soybean and sunflower to achieve self-sufficiency in oilseeds and pulses, which are vital sources of plant proteins in the country.

In another move to help small and medium-sized startups sell products internationally., India will establish e-commerce export hubs via a public-private partnership. A marker of such success is Kanpur-based OatMlk, which last year began exporting its plant-based milk to the UAE and Singapore, and has now landed in speciality stores in the UK.

The Food Safety and Standards Authority of India is currently working on a regulatory framework for novel foods like cultivated meat. In a move that would potentially interest the smart protein sector, SItharaman announced that the government will set up 100 accredited food safety labs nationwide.

“We commend the government’s continued dedication to advancing agriculture and food processing, as reflected in the latest budget,” said Sneha Singh, acting managing director of alternative protein think tank the Good Food Institute (GFI) India. She labelled the introduction of climate-resilient crops as “a significant stride towards sustainable agriculture”, and said self-sufficiency in pulses and oilseeds would “create more pathways for value-added products such as plant proteins”.

“These initiatives will not only enhance food security but also bolster agricultural sidestreams and help localise and accelerate the alternative protein sector,” explained Singh. “Continued support for entrepreneurship, particularly through schemes benefiting MSMEs and startups, is a promising move that will drive growth and innovation in smart proteins, especially cultivated and fermentation-derived proteins.”