Green finance integrates environmental sustainability with financial decision-making to combat climate change and foster sustainable development. This approach involves financing projects and initiatives such as renewable energy, energy efficiency, sustainable agriculture and pollution control, ensuring a shift towards a low-carbon and climate-resilient economy. India’s green finance evolution includes significant milestones, from the 1990s’ renewable energy focus to the rise of green bonds post-2015 and ESG integration in the 2020s. While green finance offers advantages like sustainable growth, risk reduction and societal benefits, challenges such as high costs, regulatory complexities and limited awareness persist. With policy reforms the growth of green bonds and increased public-private collaboration, green finance in India is poised for significant expansion, contributing to global sustainability goals.