The flow of capital, mostly from public sources, is directed towards  the private sector as public institutions identify adaptation and resilience requirements, allot  budgetary funds and engage private contractors to deliver solutions. 

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Globally, adaptation finance reached $63 billion in 2021-22, less than 5% of total climate finance, according to Climate Policy initiative (CPI), a think-tank. Climate finance today is directed almost entirely at mitigation measures (like energy transition). The adaptation gap is massive. Developing countries alone would require about $212 billion a year in adaptation finance by 2030, says the Global Commission on Adaptation. 

The business-ready adaptation and resilience market in India could be worth $24 billion by 2030, a likely conservative estimate by Boston Consulting Group. The annual investment needs for climate-resilient infrastructure, agriculture, water systems and health services could exceed $100 billion, according to CPI, which has identified specific requirements for water resource management, coastal protection and disaster risk reduction, all of which represent tangible business opportunities.

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Demand for adaptation is rising rapidly. The World Bank expects India’s urban climate infrastructure demand to balloon to $2.4 trillion by 2050—encompassing flood defences, water supply systems, drainage networks and more. Listed Indian firms like VA Tech Wabag, Jain Irrigation and Larsen & Toubro are already seeing returns from such projects and are participating in government programmes such as the Atal Mission for Rejuvenation and Urban Transformation (Amrut), Smart Cities and the National Water Mission that integrate resilience requirements with infrastructure procurement.

Besides infrastructure, a variety of sectors stand to gain from adaptation spending, including agriculture, technology and finance and insurance. But investing in adaptation requires early bets on frontier innovation, a mindset of long-horizon investment and a pipeline of climate-tech and resilience-first startups. These would range from biotech firms developing drought-resilient farm seeds to companies pioneering flood-proof urban materials, distributed water systems or climate-risk intelligence platforms. 

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Currently, most adaptation finance flows through public channels or international donors. In the face of climate impacts, both the public and private sectors must collaborate on meeting investment needs. However, private capital is constrained by a lack of risk data, the absence of bankable project pipelines and low regulatory clarity. This is where India needs to catalyse a new ecosystem of adaptation innovation through blended finance, procurement incentives and R&D missions aimed at resilience.

The Reserve Bank of India, in a 2022 report, projected that Indian industries will require an investment of ₹85.6 trillion by 2030 to mitigate and adapt to climate change. This sum, equivalent to 2.5% of GDP, is enormous. The report notes  that investment on this scale is necessary to maintain operations, manage risks and create new economic avenues.

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The innovations needed should focus on solutions for sectors where market-ready products or services do not yet exist. Analyses by T20 India and PwC India identify a set of priority areas. 

These include climate intelligence and analytics tools for remote sensing, forecasting and early warning systems, apart from urban water resilience devices such as rainwater harvesting, decentralized wastewater treatment and smart metering; agricultural technologies, including drought-tolerant seeds and bio-stimulants, and integrated crop insurance and advisory platforms; resilient construction materials like cool roofs, permeable paving and flood-resistant coatings; and health infrastructure capable of tackling heatwaves, floods and other climate-linked emergencies.

The urgency is clear. Without a sharp increase in adaptation spending, climate risks will rise, inflicting greater economic losses and constraining growth. For the private sector, this has two implications. First, public spending on resilience will continue to grow, providing stable demand for private contractors. Second, policy reforms and financial innovation are likely to open new commercial avenues.

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Adaptation finance has begun to resemble a growth industry where demand is policy-backed and funding is anchored in necessity. With heatwaves, floods and water stress accelerating, climate adaptation and resilience can also create a competitive advantage. 

Countries that move early to build local markets, invest in R&D and nurture adaptation-focused entrepreneurship will gain both in economic and ecological terms. This is not just about disaster management, but about developing a growth sector that private players, institutional investors and startups cannot afford to ignore.

The author is an independent expert based in New Delhi, Kolkata and Odisha. Twitter: @scurve Instagram: @soumya.scurve.