How India is using its climate crisis to wage a diplomatic war for grants

As the annual UN climate summit continues in Brazil, India and the Global South stand at a crossroads. Scientific findings and UN assessments have exposed the stark reality of the humongous cost of adapting to the climate emergency.

Adaptation funding needs for developing countries now exceed $310-365 billion each year, yet actual global flows remain a fraction of that. The gap is widening fast. Failure to bridge this chasm risks placing hundreds of millions in peril and derailing the global climate compact.

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A decade ago, world leaders pledged to keep global warming below 2 degrees Celsius. Yet emissions continue to climb and the world is failing catastrophically in that goal. Now, at Belém, the gateway city of the Amazon, India is leading an aggressive push to force wealthy countries to pay for climate solutions. A global roadmap now aims to mobilise $1.3 trillion annually for developing economies.

India insists this money must come as grants, not loans. This is because the country is wielding the climate crisis as leverage to reshape global power dynamics and secure a strategic advantage in a fractured, multipolar world.

Understanding climate finance

Climate finance essentially refers to money flowing from wealthy countries to poorer nations to help them reduce emissions and survive climate impacts. India’s argument is simple. For two centuries, developed nations industrialised by burning coal, oil and gas, filling the atmosphere with carbon dioxide that now threatens to overheat the entire planet.

India contributed just 4 per cent of global emissions since 1850, yet it is among the world’s most vulnerable to climate disasters. Heat waves are harming thousands in the country, floods are destroying harvests and droughts are drying up wells and aquifers.

The 2015 Paris Agreement legally committed wealthy nations to provide this finance. Yet in practice, most climate money arrives as loans, not grants. For countries already drowning in debt, this creates a cruel trap. They must borrow to protect themselves from climate damage they did not cause, then divert money from schools and hospitals to repay that debt.

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When India demands grants instead of loans, it is not asking for charity. It is asserting that those responsible for the problem should pay the bill without burdening the victims with new debt.

Strategic calculation

India’s push for grants is far more than an appeal to fairness. It is executing a calculated geopolitical strategy. Research from the National University of Singapore’s Institute of South Asian Studies reveals that India has fundamentally shifted from defensive climate diplomacy to an offensive leverage-building approach.

Historically, India defended its right to develop by invoking equity, which is now seen by its diplomats as a passive position. Today, India is reframing the negotiation. It is presenting climate finance not as development assistance, but as an obligation owed by debtors to the injured. It is transforming from a supplicant to a claimant demanding justice. This inversion of power dynamics is the war India is waging.

India’s weapon is its acute climate vulnerability. The UN estimates India needs $359 billion every year to build flood defences, develop drought-resistant crops and upgrade water systems to cope with the climate crisis. India is strategically amplifying these needs in international forums such as the Belém summit, linking them to the broader narrative of the Global South’s survival.

By making its own vulnerability central to negotiations, India intends to compel wealthy nations to address not just emissions but justice and survival. This transforms an apparent weakness into leverage.

Coalition power as force multiplier

India is not fighting alone. It leads the Like-Minded Developing Countries bloc and speaks for the G77 plus China coalition of over 130 countries representing over 80 per cent of humanity. This collective power dramatically amplifies India’s leverage.

When India speaks at climate summits, it claims to speak for the vulnerable everywhere. Wealthy nations cannot appear to ignore such a coalition without fracturing multilateral legitimacy.

Research from the Planetary Security Initiative shows that India has strategically built platforms like the International Solar Alliance, and the Coalition for Disaster Resilient Infrastructure to position itself not merely as a recipient of climate assistance but as a solutions provider.

These initiatives give India moral authority and coalition leadership, making its demands universal rather than merely self-interested.

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At the 2024 climate summit in Azerbaijan’s Baku, India was initially ignored. But, coalition pressure forced wealthy nations to acknowledge the USD 1.3 trillion target in the recently released roadmap. Had India negotiated alone, this would not have happened.

The coalition strategy works because wealthy nations fear that dismissing the Global South will destroy multilateral cooperation entirely.

Balancing act of playing multiple blocs

India’s diplomatic sophistication lies in balancing contradictory alliances. It cooperates with the US, Europe and Japan on clean energy through platforms like the Quad. At the same time, it allies with China and other developing countries in BRICS, defending equity principles that wealthy nations resist.

This is not really inconsistency but strategic agility. India extracts benefits from both camps while maintaining independence.

India is also increasingly leveraging geopolitical competition between the US and China. When Western nations hesitate on climate finance, India can credibly threaten deeper alignment with China and BRICS. When China blocks Indian demands, India can shift towards Western partners.

This is realpolitik dressed in the language of climate justice. India is not unique in this. All major powers operate this way. But India’s role as representative of the Global South gives it unique leverage to make claims that would appear self-serving if made by wealthy nations.

Climate finance masking industrial policy

India’s climate demands are deeply connected to building domestic manufacturing capacity in renewables, green hydrogen and electric vehicles, which are critical for economic growth and strategic autonomy. By securing concessional climate finance, India can fund these projects without excessive debt, positioning them as climate solutions while actually building industrial capability.

India’s decarbonisation diplomacy is tied to technological autonomy and reducing dependence on Chinese-dominated supply chains. Climate finance is, thus, not primarily about adaptation. It is about geopolitical autonomy in the emerging green economy. Grants, not loans, maximise fiscal space for this industrial buildout.

Vulnerability paradox

Despite this, India’s strategy contains a tension. Its acute climate vulnerability is real. It faced extreme weather on 255 of 274 days in 2024, and a 5.4 per cent GDP loss from heat stress. But, India also recorded the highest absolute increase in global emissions in 2023-24, adding 165 million tonnes.

Wealthy nations argue that India should do more domestically. India would counter that it industrialises far more cleanly than the West did, within its fair share of atmospheric space.

Both arguments have merit. As this inconsistency becomes more visible, India’s moral position weakens slightly, though its strategic leverage remains formidable.

Geopolitical reality

India’s aggressive diplomacy reflects broader geopolitical realities. The US is internally divided on climate policy and its leadership is fragile. Europe faces fiscal pressures due to the war in Ukraine. China is the largest emitter but refuses donor status. Russia is isolated.

In this fragmented multipolar world, no power can impose a settlement. India recognises this moment as opportunity. By positioning itself as the voice of the Global South, India raises its profile and influence.

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The more effective India’s coalition leadership, the more developed nations must negotiate with it. This elevates India’s standing in global governance. India’s bid to host the UN climate summit in 2028 signals ambition to institutionalize this leadership.

High climate stakes

India is waging this diplomatic war effectively. It has raised climate finance targets from near-zero to $1.3 trillion. It has kept equity principles central to negotiations. It has demonstrated that the Global South cannot be easily dismissed.

Yet the battle is far from won. Actual finance flows remain a fraction of pledges. The composition of grants versus loans remains unclear. If substantial finance does not materialise, India’s credibility as coalition leader could risk erosion.

India is, therefore, weaponising the climate crisis to reshape global financial architecture, secure industrial autonomy, and claim major power status. Whether it succeeds depends less on moral persuasion than on whether geopolitical conditions allow wealthy nations to recognise that ignoring the Global South risks climate multilateralism itself.

(The author is reporting from the ongoing UN climate summit, COP30, in Belem, Brazil)