India Forms National Authority to Drive Carbon Trading Under Paris Agreement

India has established a 21-member National Designated Authority (NDA) under the environment ministry to oversee carbon trading and related market-based mechanisms in line with its commitments under the Paris Agreement. Headed by the Union environment secretary, the authority was officially constituted on August 22 and is tasked with implementing Article 6 provisions that cover carbon credit trading through both market and non-market mechanisms.

The NDA will play a central role in recommending activities eligible for trading emission reduction units, while also maintaining a registry of approved projects and their verified carbon reductions through the Indian Carbon Market. Its functions include evaluating, approving, and authorising projects that align with greenhouse gas mitigation and carbon removal activities. This step strengthens India’s framework for achieving sustainable development and environmental integrity.

Comprising representatives from ministries such as finance, power, civil aviation, petroleum, agriculture, and renewable energy, the new authority replaces a similar body set up in May 2022. India now joins 113 countries - including the UK, France, Germany, China, and Brazil - that have established such authorities and notified the UN climate body.

Establishing the 21-member National Designated Authority under the environment ministry positions India to participate meaningfully in Article 6 bilateral and multilateral carbon-credit trading. The NDA structure - spanning finance, power, aviation, petroleum, agriculture and renewable-energy ministries - reflects the cross-sectoral coordination required for credit-generating project approval and registry management.

For Indian corporates and project developers, the NDA framework creates a domestic institutional pathway to generate Paris-Agreement-eligible international carbon credits. Well-designed activities in renewables, forestry, methane reduction and clean cooking could unlock revenue streams that complement domestic policy support and international climate-finance flows.

For companies evaluating Article 6-eligible project development, corporate carbon-credit purchasers, and financial institutions structuring related transactions, Cognitud's climate action, responsible investment and sustainability due diligence teams help clients evaluate India-anchored credit-generation opportunities, structure procurement processes aligned with NDA registry requirements, and prepare disclosures that meet ISSB, TCFD and voluntary-market integrity expectations for the growing role of international credits in corporate net-zero strategy.