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  • India is emerging as a key testing ground for agriculture-based carbon markets, highlighted by a major deal between Amazon and The Good Rice Alliance, where over 685,000 tonnes of carbon credits will be sourced from 13,000 rice farmers using methane-reducing farming techniques across 35,000 hectares.
  • This marks a broader shift in global carbon markets, with companies moving away from simply buying offsets to directly investing in projects that generate high-integrity, verifiable, and science-backed credits, supported by field data and satellite monitoring.
  • India’s central role in this transition stems from its large agricultural base, where farming contributes around 14% of emissions but also offers strong carbon reduction potential, along with institutional support from research bodies and growing agri-tech ecosystems.
  • Additionally, with over 82% small and marginal farmers, carbon markets are being positioned not just as climate solutions but also as alternative income streams, making India uniquely placed compared to other regions. On-ground challenges persist, including transparency gaps, weak verification systems, delays in credit issuance, and risks like double counting, raising concerns about the credibility and scalability of such projects.
  • However, on-ground challenges persist, including transparency gaps, weak verification systems, delays in credit issuance, and risks like double counting, raising concerns about the credibility and scalability of such projects.
  • Trust remains a critical issue, as farmers tend to rely more on government institutions than private or international players, while limited financial returns, due to revenue sharing with developers and certification costs, may reduce long-term participation.
  • Policy frameworks like the Carbon Credit Trading Scheme (2023) aim to formalise the market, but key questions remain, especially around ownership of carbon credits and how exports of these credits could impact India’s commitments under the Paris Climate Agreement.
  • Overall, while India has the scale, infrastructure, and opportunity to lead in agri-based carbon markets, the success of this model will depend on building trust, ensuring fair farmer benefits, and strengthening monitoring systems, which could eventually position it as a blueprint for the Global South.