About $180 billion worth of sustainable bonds issued in the Asia-Pacific region during the 2020-2021 period are expected to mature by 2026, as per a recent report. In India, the issuance of sustainable bonds is projected to remain limited, with a focus on sovereign green tranches due to minimal corporate involvement.
India’s sustainable bond issuance, which was relatively small, decreased to $2 billion in 2025, with green bonds accounting for the majority at 62%. The S&P ‘Global Sustainable Bonds Outlook Report’ highlighted that the remaining issuance comprised social bonds.
The report noted that green labeled instruments in India could align with the country’s climate objectives, necessitating an annual investment of $250 billion until 2047 based on India’s Climate Finance Taxonomy framework. Conversely, social bonds addressing themes like financial inclusion and women empowerment are expected to have a niche presence due to perceived complexity by investors.
In efforts to bolster the domestic green yield curve and attract institutional investors, the Indian government has introduced additional tranches of sovereign green bonds denominated in Indian rupees. Sovereign green bonds constituted a significant portion, accounting for 94% and 58% of the green bond and overall sustainable bond market in India in 2025, respectively.
Despite progress, challenges such as a green bonds auction cancellation by the Reserve Bank of India in June due to high yield demands have been encountered. India achieved its target of 50% installed renewable energy capacity in 2025, five years ahead of schedule.
The report anticipates a stable to slightly increasing issuance of $170 billion-$200 billion in the Asia-Pacific region in 2026. Factors supporting this projection include significant maturities in 2026-2027, robust local-currency debt capital markets, and regulatory initiatives. However, economic uncertainties and evolving trade policies influenced by geopolitical tensions may dampen the growth potential of bond issuances.
