India’s Urban Transformation: Building the Future Without Racking up Carbon Debt

India, one of the fastest-growing economies in the world, is urbanizing rapidly. By 2030, more than 40 percent of its populace is projected to live in urban areas, contributing there to more than 70 percent of the nation’s greenhouse gas emissions. The demand for commercial and residential spaces is surging, which attracts global investors eager to capitalize on this dynamic market. This rapid growth comes with a pressing question, however: can India urbanize without following the carbon-heavy trajectory of other developed countries?

Picture1_1024.jpg

Speaking at the recent ULI India Conference are moderator Amit Grover, CEO of City Side Development, Adani Airport Holdings; Andy Lantz, co-CEO and creative director, RIOS; Nandini Sampat, principal architect, Somaya and Kalappa Consultants; and Rohit Bansal, group head of communications, Reliance Industries Limited.

India, one of the fastest-growing economies in the world, is urbanizing rapidly. By 2030, more than 40 percent of its populace is projected to live in urban areas, contributing there to more than 70 percent of the nation’s greenhouse gas emissions. The demand for commercial and residential spaces is surging, which attracts global investors eager to capitalize on this dynamic market. This rapid growth comes with a pressing question, however: can India urbanize without following the carbon-heavy trajectory of other developed countries?

At the recent ULI India Conference on urban transformation, Chris Fair of Resonance Consultancy shared insights from the firm’s research on Asia-Pacific’s Best Cities, which ranked 140 cities based upon three categories—livability, loveability, and prosperity. Although Delhi, Mumbai, and Bengaluru respectively ranked 12th, 13th, and 14th overall, Indian cities lagged in livability rankings due to infrastructure gaps that limit mobility, connectivity, and access to quality open spaces. Panelists emphasized that transit-oriented development (TOD), alongside community integration and context-driven planning, will be crucial in reshaping India’s urbanscape—improving accessibility while reducing congestion and emissions. With access to global knowledge and disruptive technological advancements, Indian cities are uniquely positioned to urbanize via low-carbon pathways, thus ensuring economic and environmental resilience while setting an example for emerging markets.

Green building: progress, but room to grow

Green building practices are taking root in India’s real estate sector, especially in commercial developments catering to multinational corporations, regardless of whether they are occupants or investors. Leading projects are increasingly incorporating such certifications as LEED and GRIHA (Green Rating for Integrated Habitat), even as major developers are adopting sustainability frameworks. International investors are prioritizing ESG-aligned portfolios that reflect a growing global shift toward environmentally conscious investing.

These efforts represent only a fraction of the market, though. India’s real estate and construction sectors contribute 32 percent of the country’s total greenhouse gas emissions, underscoring the urgent need to scale sustainable development across all asset classes. The opportunity lies in integrating low-carbon strategies early—allowing India to avoid the pitfalls of carbon-intensive urbanization and set a new global precedent.

Even as green buildings gain momentum in premium commercial spaces, immense potential exists for broader adoption. Midmarket offices, affordable housing, and infrastructure projects remain largely untapped. According to JLL research, Mumbai faces a 62-percent undersupply of ESG-aligned office spaces, and Delhi faces a 44-percent gap, making these cities ripe for green investment.

Noida,,Uttar,Pradesh,,India-dec,21,2019:,Concrete,Work,Builder,Carpenter

Shutterstock

The policy puzzle: bridging ambition and action

India has committed to ambitious climate goals—a 45-percent reduction in emissions intensity by 2030, 50 percent of electricity generated from renewables by 2030, and net zero emissions by 2070. Although these targets are commendable, an actionable roadmap for the real estate sector that aligns with these goals has not yet been developed.

Current policies, such as the National Building Code (NBC) and the Energy Conservation Building Code (ECBC), provide guidelines for energy efficiency and sustainability in new and redeveloped projects. Enforcement remains uneven across regions, however, due to limited resources and awareness. Expanding ECBC standards to residential buildings and introducing specific mandates for energy use intensity (EUI) and embodied carbon could drive industry-wide adoption of greener practices.

Localized solutions: learning from the past and from the east

India has the chance to redefine urban growth by embracing its unique context. Instead of relying on energy-intensive glass towers—poorly suited to India’s tropical climate—developers can draw inspiration from traditional architecture. Historically, such features as shaded courtyards, thick walls, and passive cooling techniques (jaalis, for example) ensured energy efficiency in Indian buildings. By modernizing and scaling these approaches, cities can reduce energy use while preserving cultural identity.

The urbanization models of India’s eastern counterparts also offer experiential knowledge. Singapore’s Green Mark program, Tokyo’s Zero Energy building initiatives, and Hong Kong’s transit-oriented planning demonstrate how policy alignment and private-sector participation can drive sustainability in dense local contexts, thereby ensuring that urban growth is both efficient and inclusive.

Opportunities for investors

India’s real estate sector presents compelling opportunities for investors who prioritize sustainability:

The greening grid: With 50 percent of India’s grid to get power from renewables by 2030, buildings that integrate clean power sources will be well positioned for net zero targets.

ESG demand versus supply gap: Global tenants are actively seeking green-certified spaces, yet supply remains limited. Early investors can capitalize on this gap, particularly in Tier 1 and Tier 2 cities.

Climate tech and property tech: According to Rohit Rajput of Intersection Ventures, climate tech adoption in India shows promise in specific segments, particularly among asset owners who directly operate their properties—corporate campuses, REITs, and hotels, for example. Targeted opportunities exist where operational efficiencies can drive clear returns on investment.

Public/private partnerships: Cities across India need substantial infrastructure investments, and PPPs offer a viable model to drive low-carbon development. A notable example of this model is IT City in Lucknow, a sustainable technology hub being built in partnership with HCL Technologies.

A defining moment for India’s built environment

India’s urban fabric is on the brink of transformation. With the right strategies, the country can integrate sustainability into its urban growth model, serving its unique context while enabling global capabilities.

By embedding sustainability into investment frameworks and development strategies, India can ensure its cities not only grow but also thrive—balancing economic growth with environmental stewardship. The choices made today will determine whether India sets a global benchmark for sustainable urbanization or grapples with the consequences of unchecked carbon emissions.

For investors willing to bet on India’s green future, the rewards could go beyond financial returns; they could help redefine global cityscapes.

Vidyashree Unnikrishnan is a senior researcher with ULI Asia Pacific.
Related Content
Members Sign In
Don’t have an account yet? Sign up for a ULI guest account.
E-Newsletter
This Week in Urban Land
Sign up to get UL articles delivered to your inbox weekly.
Members Get More

With a ULI membership, you’ll stay informed on the most important topics shaping the world of real estate with unlimited access to the award-winning Urban Land magazine.

Learn more about the benefits of membership
Already have an account?