India and Japan have signed a Memorandum of Cooperation on the Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement, deepening their climate partnership and unlocking new avenues for low-carbon investment, technology transfer, and carbon credit trading.

The agreement, finalized earlier this month and highlighted during Prime Minister Narendra Modi’s ongoing visit to Japan, underscores the two countries’ shared commitment to a greener future. The JCM is positioned as a cornerstone of Indo-Japan cooperation on climate change, aligning with India’s long-term low-carbon development strategy and its target of achieving net zero by 2070.

Under the mechanism, projects involving advanced low-carbon technologies will gain access to international investment flows, technology assistance, and capacity-building support, reducing the high upfront costs that currently constrain large-scale deployment. By fostering local partnerships and creating domestic ecosystems for equipment, systems, and infrastructure, the JCM is expected to accelerate the localization and scaling of cutting-edge clean energy solutions in India.

A critical feature of the cooperation is its link to global carbon markets. The credits generated through JCM projects will be eligible for international trading under Article 6.2 of the Paris Agreement, creating new economic opportunities without compromising India’s nationally determined contributions. The arrangement allows India to attract global capital while positioning itself as a hub for innovation in carbon-reduction technologies.

The Ministry of Environment, Forest and Climate Change, backed by Union Cabinet approval, is also moving ahead with the Rules of Implementation that will govern the JCM domestically. This framework will serve as the foundation for similar bilateral arrangements with other countries, broadening India’s participation in global carbon markets and reinforcing its leadership in climate diplomacy.

The agreement with Japan marks not just a milestone in bilateral ties but also a significant step in embedding climate action into India’s growth trajectory—linking clean technology deployment with economic development and global climate responsibility.