India has two separate routes into carbon credits. Anyone can buy voluntary credits to compensate for their emissions, while a new compliance market sets targets for energy-intensive industry. This guide explains both, plus the tax and advertising rules. For other countries, see our countries hub.
India’s compliance market (CCTS)
The CCTS sets emission-intensity targets for energy-intensive sectors. Companies that beat their targets earn tradable certificates, called Carbon Credit Certificates, which trade through power exchangesSource 7. It also includes an offset mechanism for voluntary projectsSource 8.
The scheme was notified on 28 June 2023 (S.O. 2825(E)) and amended on 19 December 2023 (S.O. 5369(E))Source 6. The December amendment introduced the offset mechanism, which lets non-obligated entities take part through voluntary climate mitigation projectsSource 8.
Who runs it
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| Role | Body |
|---|---|
| Oversight | National Steering Committee, co-chaired by the Secretaries of the Ministry of Power and MoEFCC |
| Administrator | Bureau of Energy Efficiency (BEE) |
| Registry | Grid Controller of India Limited |
| Trading regulator | Central Electricity Regulatory Commission (CERC) |
As of Oct 2026
These roles are set out in the Ministry of Power’s February 2026 statement on the schemeSource 7. BEE publishes the scheme’s notifications and rules on its carbon market pageSource 5.
Which industries have targets
The first emission-intensity targets were notified in October 2025 for aluminium, cement, chlor-alkali, and pulp and paper, covering 282 obligated entitiesSource 4. A notification on 13 January 2026 added petroleum refineries, petrochemicals, textiles and secondary aluminium, bringing the total to 490 obligated entitiesSource 4.
The offset mechanism
In March 2025 the government approved the detailed procedure for the offset mechanism and eight methodologiesSource 8. They cover areas including renewable energy, green hydrogen, industrial energy efficiency, landfill methane recovery, and mangrove afforestation and reforestationSource 8. Non-obligated entities, including renewable energy producers, may voluntarily register approved mitigation activities under the schemeSource 7.
For a buyer, this means the CCTS is mainly a market between Indian companies and project developers. Carbon Credit Certificates trade through power exchanges between participants in the schemeSource 7, not through retail shops. If you want to compensate for your own emissions, the voluntary market below is the route.
Green credits are not carbon credits
The Green Credit Programme is a separate scheme. Its rules were notified on 12 October 2023 under the Environment (Protection) Act, 1986, and the Indian Council of Forestry Research and Education, Dehradun, is its AdministratorSource 9. Green credits for forest restoration can be claimed only after at least five years of restoration and a canopy density of at least 40%Source 9.
Buying voluntary credits from India
Individuals can buy from online retailers, marketplaces and brokers. The CCTS itself is for obligated entities and for registering approved projectsSource 7, so individuals buy in the voluntary market.
Before you pay, ask which registry holds the credits and check that they are retired in your name. Our guide to how to verify carbon credits shows the steps, and where to buy compares providers on registry serials and certificates.
Reduce first, then offset
Cut what you can before you buy, and use credits for the emissions that are left. Our guide for individuals shows how to size a purchase.
Claims & tax notes
Tax treatment
The Income-tax Act, 2025 came into force on 1 April 2026, replacing the Income-tax Act, 1961Source 12. It taxes income by way of transfer of carbon credits at 10%, with no deduction for any expenditure or allowanceSource 11. This applies to people who sell credits, not to buyers.
We found no CBIC circular or notification specifically on GST for carbon credits. Get professional advice before you buy in volume.
What you can say about offsets
The Central Consumer Protection Authority issued guidelines on greenwashing and misleading environmental claims on 15 October 2024. They require environmental claims to be substantiated with credible evidence, and vague terms such as “eco-friendly”, “green” and “sustainable” need proper substantiationSource 13.
ASCI’s guidelines on green claims took effect on 15 February 2024. Advertisers should clearly disclose offsets that won’t occur within the next two years, and should not present a reduction that was required by law as an offsetSource 14.
How to check quality before you buy
Each Verra credit represents one tonne of CO₂e reduced or removedSource 1, and registries such as Gold Standard’s track every credit from issuance to retirementSource 2. That makes three checks possible before you pay:
- Is it in a public registry? Ask for the registry and serial numbers, and check the credits are retired in your name.
- Is the method credible? The ICVCM’s Core Carbon Principles set a quality threshold, and credits that meet it can carry the CCP labelSource 3.
- Is the seller clear? A good seller says what you are buying, what it charges and how and in whose name it retires credits.
Our quality section explains each check, and carbon credit scams lists the warning signs.
Article 6 deals
On 7 August 2025 Japan and India signed a memorandum of cooperation on the Joint Crediting Mechanism, which Japan describes as consistent with Article 6 of the Paris AgreementSource 15.
Our Japan guide explains how the JCM works. For other countries’ Article 6 arrangements, see the UAE and Singapore.
How to buy, step by step
Step 1: Work out what to cover
Estimate your footprint and cut what you can first.
Step 2: Choose a project type
Pick credits from a standard and project type you trust.
Step 3: Pick a provider
Compare retailers, marketplaces and brokers on registry serials and certificates.
Step 4: Check the registry record
Confirm the credits are retired in your name on the registry.
Not sure how compliance and voluntary markets differ? Read voluntary vs compliance markets.