Financing challenges, opportunities, and recommendations for integrated water resource management

India faces an alarming water crisis, intensified by climate change, rapid urbanisation, extreme weather events, and the aftermath of the COVID-19 pandemic. Groundwater is depleting at an unsustainable rate, with 21 major cities nearing exhaustion and 40% of the population projected to lack access to drinking water by 2030. Compounding the issue are failing infrastructure, over-extraction of groundwater, and inadequate wastewater treatment. Financial and non-financial risks, such as data gaps, unclear project returns, and long tenures, further deter investor interest in the sector.

To meet growing demand and achieve SDG 6 (Clean Water and Sanitation), global investments in water must triple to US$114 billion annually. With every US$1 invested expected to return US$4.3 in value, this sector presents a strong case for public and private investment. This white paper outlines four key areas to reform India’s water sector: strengthening governance and policy coherence across levels, mobilising finance through innovative tools like green bonds and blended finance, fostering investor confidence through improved risk assessment and transparency, and scaling community-based models such as Water ATMs and peer to peer water sharing initiatives.

An enabling ecosystem, backed by integrated resource management, robust execution, and strategic financing, can secure India’s water future. The paper urges stakeholders to collaborate on replicable and scalable solutions, leveraging both policy reforms and capital flows to ensure water reaches the right place, at the right time, and at the right price. A focused, inclusive approach will allow India to navigate its water challenges while enabling innovation and sustainable growth in the sector.