India’s carbon market is witnessing a transition from large renewable energy projects to agriculture-based initiatives, with companies now investing in farm-level carbon credits. A recent deal involving rice cultivation highlights how practices like reducing methane emissions and improving soil carbon are becoming central to generating credits.
However, the move toward farm-based carbon projects faces structural challenges due to India’s fragmented landholdings. Small and scattered farms make it difficult to measure, verify, and aggregate carbon credits efficiently, raising concerns over transparency and pricing. Experts note that uncertain returns and dependence on intermediaries could limit benefits for farmers unless stronger policies and fair market mechanisms are implemented.
