The adoption of green-certified buildings in India is accelerating, driven by regulatory incentives, policy mandates and increasing consumer awareness. According to the Indian Green Building Council (IGBC), India is the third-largest market for Leadership in Energy and Environmental Design (LEED)-certified buildings, with more than 8.5 million square feet of green-certified space.
Industry experts expect this growth will continue, citing government regulations, climate action commitments and the financial benefits of sustainable construction as key drivers. The shift is supported by both public sector policies and private sector investments, as developers align their projects with India’s sustainability goals for the years ahead.
Government push for sustainable construction
The government has launched several initiatives to promote eco-friendly real estate development, including the Energy Conservation Building Code (ECBC), which sets minimum energy efficiency standards for new buildings. Municipalities in cities like Pune, Hyderabad, Bengaluru and Mumbai offer property tax rebates of up to 10% for projects that meet sustainability benchmarks.
These measures are in line with India’s goal of achieving net-zero carbon emissions by 2070. The Ministry of Housing and Urban Affairs has emphasised the importance of integrating energy-efficient construction practices into urban planning, especially in Tier 1 and Tier 2 cities, where informed customers are increasingly demanding sustainable solutions.
Financial and economic benefits drive market adoption
Data from real estate industry bodies suggest that while green-certified buildings require an initial investment which is 3-5% higher than conventional structures, long-term cost savings on electricity, water and maintenance outweigh the upfront costs and eventually help in mapping a more robust green and sustainable ecosystem.
Industry estimates indicate that energy-efficient homes can reduce electricity consumption by 30-50% through features like advanced insulation, smart lighting systems and solar power integration. Water conservation technologies, including rainwater harvesting and high-efficiency plumbing fixtures, can lower water usage by up to 40%. Analysts tracking real estate investment trends report that homebuyers and institutional investors are increasingly considering sustainability as a key determinant of property value.
Rising demand for green homes in Indian cities
Consumer demand for green housing has risen sharply, particularly in metros and Tier-1 cities, where energy costs and water shortages are driving homebuyers to seek resource-efficient properties. According to a recent survey conducted by a real estate research firm, over 60% of prospective homebuyers in urban areas expressed a preference for properties with green certifications. They cite lower utility costs, enhanced indoor air quality and long-term financial benefits as the primary motivators.
From a latest trend, the developers are increasingly incorporating sustainability elements into new projects as demand for eco-conscious housing continues to grow in prime cities like Gurgaon, Delhi, Bangalore and Hyderabad. Some of the recent survey findings also suggest that green-certified properties command a resale premium in the market, with energy-efficient homes attracting more buyers due to their lower long-term costs.
Health benefits and improved quality of living
Beyond financial savings, green buildings significantly contribute to public health by improving indoor air quality and reducing pollutants. Certified projects prioritise low-VOC (volatile organic compound) materials, enhanced ventilation systems and natural lighting, all of which help minimise exposure to allergens and airborne toxins. With air pollution being a major concern in India’s urban areas, green buildings are designed to tackle this issue by incorporating advanced filtration systems and energy-efficient designs, offering occupants a healthier and more comfortable indoor environment.
Types of green certifications in India
India has developed several esteemed green building certification systems to promote sustainability in the real estate sector. Among the most prominent are LEED (Leadership in Energy and Environmental Design), IGBC (Indian Green Building Council) and GRIHA (Green Rating for Integrated Habitat Assessment).
LEED, established by the U.S. Green Building Council, evaluates buildings based on key sustainability metrics such as energy efficiency, water conservation, and carbon footprint reduction. IGBC, managed by the Confederation of Indian Industry, offers a rating system that is specifically designed to address India’s unique climate and environmental challenges. GRIHA, endorsed by the Ministry of New and Renewable Energy, assesses buildings on parameters such as sustainable site planning, resource-efficient materials, and waste management strategies.
Each certification system categorises buildings into various levels—Certified, Silver, Gold and Platinum—depending on their performance in meeting environmental and sustainability standards. These certifications not only support eco-friendly practices but also play a crucial role in driving the growth of green buildings across India.
Few challenges in large-scale adoption
Despite growing awareness, several challenges hinder the widespread adoption of green-certified buildings in India. High upfront costs for energy-efficient materials and advanced construction techniques remain a key barrier for developers. Additionally, limited awareness among homebuyers and developers about the financial and environmental benefits of green projects further slows progress. A shortage of skilled labor in green construction also hampers the supply chain.
Government incentives and educational initiatives could help overcome these obstacles, supporting the transition to sustainable building practices. With growing government support and a focus on energy efficiency, green-certified buildings are gaining traction, especially in cities prioritising sustainability. Although challenges like higher initial costs remain, the demand for certified properties continues to rise. As urbanisation increases, green construction will be crucial to India’s long-term infrastructure development, benefiting both the real estate sector and housing finance companies.
(The author, Madhvi Gupta, is the Head – Marketing and Communications, at IIFL Home Finance.)
