When negotiators left Baku after COP 29 (Conference of the Parties), the global carbon-market landscape finally had a shape. Years of wrangling over Article 6 of the Paris Agreement—the rulebook for how countries can trade verified emission reductions—had produced workable text. For India, this was the moment to move from commitment to construction.
In August 2025, the Ministry of Environment, Forest and Climate Change (MoEF&CC), Govt. of India announced the creation of a National Designated Authority (NDA) to steer India’s participation in international carbon markets. It is more than a bureaucratic body—it is the country’s bridge between climate ambition and real capital flows.
Why the NDA matters now?
At COP 29, Parties hammered out the long-delayed operational rules of Article 6. They agreed on how countries would authorise carbon credits, avoid double counting, apply corresponding adjustments, and protect environmental integrity. This clarity unlocked the door for developing countries to set up national systems that can issue, transfer, and account for mitigation outcomes.
India wasted little time. The MoEF&CC’s notification of a 21-member NDA, chaired by the Environment Secretary, provides a single window to approve projects, manage registries, and oversee carbon transactions that involve international partners. The NDA’s creation also fulfils a political commitment India made in Baku: to operationalise an institutional framework enabling high-integrity carbon trading by 2025.
The timing is deliberate. India’s domestic Carbon Credit Trading Scheme (CCTS)—launched in 2023—has already begun building a national compliance market. The NDA now adds the international layer, integrating India’s homegrown system with the global carbon-finance architecture.
The Architecture: What the NDA Will Actually Do
In simple terms, the National Designated Authority (NDA) will act as India’s gatekeeper, accountant, and integrity steward under Article 6.
- Authorising international transfers (Article 6.2):
The NDA will determine which emission-reduction projects can generate Internationally Transferred Mitigation Outcomes (ITMOs). It will issue letters of authorisation, decide whether credits count toward India’s own Nationally Determined Contribution (NDC), and ensure that corresponding adjustments are reflected in national inventories. - Approving projects under the UN mechanism (Article 6.4):
The new UN-supervised mechanism—the successor to the Clean Development Mechanism—requires national approval of every project. The NDA will evaluate additionality, baselines, and sustainable-development contributions, ensuring Indian projects meet both domestic and international criteria. - Maintaining national accounts and registries:
India’s Grid Controller of India Ltd. (GCIL) has been designated to operate the national registry under the CCTS. The NDA will coordinate with it to ensure credits are uniquely tracked, adjusted, and retired without duplication. - Aligning domestic and international markets:
Coordination with the Bureau of Energy Efficiency (BEE)—which administers the CCTS—will be essential. Developers and corporate buyers need clarity on whether a credit can be used domestically, exported, or both. The NDA’s rules will decide that boundary. - Upholding integrity and safeguards:
Beyond carbon accounting, the NDA’s job is to ensure projects comply with social and environmental safeguards, protect communities, and maintain transparency in how mitigation outcomes are measured, reported, and verified.
Bridging two Worlds: The Domestic CCTS and the Global Market
India’s domestic carbon market and the international Article 6 system will inevitably intersect. Their alignment will determine investor confidence.
- Domestic purpose: The CCTS allows energy-intensive sectors to meet emission-reduction obligations through national credits.
- International purpose: The NDA framework allows Indian projects to sell high-quality credits abroad, where buyers—sovereigns or corporates—seek authorised, adjusted units for compliance or voluntary purposes.
What India Stands to Gain?
- Mobilising Climate Finance at Scale
India’s climate investment needs run into trillions of dollars by mid-century. High-integrity carbon markets can unlock a new channel of results-based finance, particularly for sectors and geographies where traditional lending is limited.
Projects in waste management, rural energy efficiency, agro-forestry, and coastal restoration can all qualify for results-based payments. - Technology Transfer and Industrial Upgrading
Bilateral carbon-trading partnerships can be tied to technology access. For instance, an agreement with a European or Japanese partner might combine credit purchases with deployment of green-hydrogen systems, industrial heat pumps, or carbon-capture pilots. The NDA can make such co-benefits a condition for authorisation, turning credit transfers into industrial-modernisation pathways. - Sub-national Participation
State governments and city administrations can propose programmatic approaches—aggregating smaller projects in solid-waste management, public-transport electrification, or clean-cooking adoption. By lowering transaction costs, this expands participation beyond large industrial actors to municipalities and MSMEs. - Co-benefits and a Just Transition
Well-designed projects can deliver livelihood and adaptation gains. For example, mangrove restoration sequesters carbon while shielding coastal communities from cyclones. Agro-forestry enhances soil health and rural incomes. The NDA can prioritise such dual-benefit interventions, aligning market mechanisms with national development goals.
Guarding against old pitfalls
The world’s first carbon markets under Kyoto’s Clean Development Mechanism (CDM) taught difficult lessons. Many projects failed tests of additionality, transparency, or community consent. The NDA has an opportunity—and responsibility—to set a higher bar.
- Rigorous Additionality Tests
Credits must reward actions that wouldn’t happen without carbon finance. Projects mandated by existing policy—like solar parks under renewable-purchase obligations—should not qualify. For mature technologies, financial or investment-barrier tests can demonstrate genuine need. - Dynamic Baselines and Conservative Estimates
Baselines should tighten over time as technology improves. Benchmarking emissions intensity, rather than using static historical data, avoids windfall credits. - Safeguards for Land and Communities
Projects involving land use must ensure Free, Prior and Informed Consent (FPIC), transparent benefit-sharing, and grievance mechanisms. Public disclosure of project documents will build trust.
Governance: The Fine Print that defines success
Clarity and Coordination
India’s carbon-market ecosystem now spans the MoEF&CC (NDA), the BEE (CCTS), and GCIL (registry). A clear division of labour—supported by standard operating procedures and digital linkages—is critical to prevent overlap and confusion.
Transparent Authorisation Framework
The NDA should publish public guidelines listing eligible project types, sustainability criteria, share-of-proceeds rules, and timelines for approvals. Transparency breeds investor confidence and speeds up deal-making.
Open Data and Stakeholder Dialogue
A credible market thrives on sunlight. Publicly accessible registries, consultation with states, and engagement with civil society can prevent reputational risks and ensure community buy-in—especially for land-based projects.
What Global Buyers will Watch
For potential partners—from sovereign buyers to multinational corporations—India’s attractiveness will hinge on five factors:
- Policy stability: Clear, consistent rules and a permanent NDA secretariat.
- Quality assurance: Conservative baselines, robust MRV, and transparent audits.
- Legal certainty: Explicit authorisation letters and proof of corresponding adjustments.
- Development narrative: Tangible social and environmental co-benefits.
- Execution track record: Early pilot projects delivered on schedule and verified independently.
A few successful pilots could establish India as a premium supplier of high-integrity credits, commanding better prices and strategic partnerships.
Near-Term Priorities for 2025-26
- Publish operational rules and service timelines for project approval and authorisation.
- Select a pilot cohort of 5–7 programmatic projects—landfill methane, MSME efficiency, mangrove restoration—and run them through the full NDA process.
- Sign bilateral cooperation agreements under Article 6.2 with technology-rich partners in Europe, Japan, and the Gulf.
- Link domestic and international registries to ensure unique serialisation and transparent tracking.
- Set an integrity benchmark above international minimums—so Indian credits trade at a quality premium, not a discount.
- Earmark a portion of revenues for adaptation and just-transition initiatives, showcasing climate justice in action.
Looking Ahead: What Success Could Mean by 2027
If executed effectively, the National Designated Authority (NDA) can deliver measurable and transformative outcomes within just two years. Its success could mobilize billions of dollars in results-based climate finance for projects that not only cut emissions but also improve livelihoods across India.
By forging international technology partnerships, the NDA can help modernize Indian industries—enhancing efficiency, innovation, and global competitiveness in sectors ranging from steel and cement to transport and energy. A central outcome would be the establishment of a trusted national carbon registry, setting a benchmark for transparency and accountability in the Global South.
The NDA’s framework can also demonstrate that carbon markets are not a substitute for domestic decarbonization efforts but a complementary tool to accelerate the transition. Most importantly, an effective NDA would strengthen India’s position in future climate negotiations, showing that markets can work in tandem with growth, integrity, and climate justice. This would reinforce India’s credibility as a leader in shaping equitable carbon governance for developing economies, positioning it as a bridge between global ambition and national action. Within two years, the NDA has the potential to prove that with the right governance, carbon markets can drive tangible progress for both the planet and its people.
From Carbon Credits to Climate Credibility
The National Designated Authority (NDA) is not merely an institutional requirement under COP 29—it is India’s chance to reshape the narrative of carbon markets. For too long, developing countries have been viewed as credit suppliers rather than equal partners. By designing a system that prizes integrity, co-benefits, and national interest, India can flip that equation.
Markets are powerful only when they trade in trust. If the NDA embeds transparency, fairness, and measurable impact into every transaction, India could pioneer a “high-integrity marketplace for the Global South.” Such a platform would not only bring finance but also signal that emerging economies can lead in crafting credible climate solutions.
It is an opportunity to turn carbon trading from a technical exercise into a development instrument that funds resilience, fuels innovation, and fortifies India’s path to net-zero.