Growth of India’s agricultural economy rests upon decades of robust and deliberate public policy framework. The vast network of agri extension centres and rural bank branches is a significant component of that architecture. Aided by this very architecture, agricultural credit has expanded rapidly over the past decade, growing at an average rate of around 13% annually and reaching 32.5 lakh cr in 2026.But agriculture operates in a more complex and uncertain landscape today, and climate change is arguably the single biggest factor behind these complexities and uncertainties. This is not surprising considering the fact that more than half of India’s cultivated land is rain-fed and susceptible to erratic monsoons, heat stress, and extreme weather events. Over the years, soil degradation has affected nearly one third of India’s land, while water stress is intensifying across key agricultural regions. These are changes which will come with a cataclysmic cascading effect.The real question that emerges then is how can India leverage its strong foundation of public finance to enable the next phase of agricultural transformation, supporting farmers not just to produce more, but to produce better and more sustainably?Regenerative agriculture improves soil health, enhancing water efficiency, and restoring ecosystems, it can strengthen farm resilience while sustaining productivity. Yet, adoption remains limited because the economics of transition are not immediately viable; benefits accrue over time, while costs are immediate.For a smallholder farmer, the shift to regenerative practices often involves upfront investment, uncertain early returns, and limited access to flexible credit. This creates a financing gap. The constraint is not intent, but the absence of aligned capital and coordinated action.Bridging this gap requires more than isolated interventions. It calls for aligning public, private, and philanthropic capital, and ensuring that incentives across the value chain reinforce, rather than undermine, sustainable practices. The transition to regenerative agriculture is, therefore, not just technical; it is financial, institutional, and systemic.The private sector has traditionally engaged with agriculture as a buyer of commodities, focused on price and volume. And although public policy driven protocols are outside the private players’ domain of expected action, the current transactional model is no longer sufficient.Climate change is already disrupting supply chains, affecting yields, quality, and sourcing geographies. At the same time, soil degradation and water stress threaten long-term productivity. Against this background, regenerative agriculture is no longer a peripheral concern but comes out as something central to business resilience. Integrating sustainable practices into sourcing strategies allows companies to align with decarbonisation pathways, strengthen supply chain stability, and meet evolving consumer and investor expectations.This creates a strong case for corporates to move from buyers to partners: co-investing in farmer transitions, supporting aggregation and traceability, and working with financial institutions to unlock capital flows to the farm level. Early efforts by companies such as ITC and Unilever demonstrate how sustainability-linked sourcing can improve both farmer outcomes and business resilience.India’s agricultural credit system is extensive, but remains largely oriented toward short-term crop finance. Farmers still face persistent barriers in transitioning to sustainable practices, high upfront costs, uncertain returns, and limited access to flexible credit. Financial institutions, in turn, often perceive these transitions as high-risk, particularly in fragmented value chains. This perception is compounded by limited awareness of climate-resilience technologies and the absence of standardized, bankable model project reports that can clearly demonstrate the investment costs, risk & expected returns and repayment potential of sustainable farming practicesThe result is a misalignment between policy ambition and capital flows. Addressing this requires moving from siloed approaches to coordinated systems specially with 86% of Indian farmers being small and marginal farmers with meagre land holdings.As agriculture transitions toward more sustainable and regenerative practices, financing must evolve. Without corporate participation, scale and market integration remain limited, and development finance will be essential to crowd in private capital and align incentives across the value chain.This is where the power of convergence and support, and capacity of convening institutions become essential. Initiatives such as PRANA (Promoting Regenerative and No-Burn Agriculture) demonstrate this. Working with over 2.2 lakh farmers in Punjab, PRANA brings together policy support, farmer training, and behavioural interventions to reduce crop residue burning, improve soil health, and promote water-efficient practices. The strength of the model lies not in any single intervention, but in its ability to coordinate multiple stakeholders toward a shared outcome.The scale of investment required is significant, with estimates suggesting that transforming global food systems will require between $300 bn and $350 bn in capital investment annually through 2030. Financing this transition will require innovative instruments but, more importantly, coordinated deployment of capital. The pilots supported by Green Climate Fund (GCF) and Adaptation Fund (AF) are valuable in demonstrating what works. But they cannot by themselves deliver transformation at scale . Real scale will come only through financial convergence--by combining concessional capital, public schemes, agricultural credit, private investment, guarantees, insurance and blended finance instruments. Emerging carbon and biodiversity markets can provide additional revenue streams for farmers.Finance alone cannot drive transformation. Adoption depends on enabling systems. India has already made important progress, including creation of over 10,000 farmer producer organisations (FPOs) to support aggregation and market access. But scaling regenerative agriculture will require stronger market linkages, capacity building, and technical support.Measurement, reporting and verification (MRV) systems are equally critical. The ability to measure and verify outcomes, soil health, water quality and quantity, carbon sequestration, income stability, is essential to build investor confidence and enable outcome-based financing. Advances in soil sensors, satellite imagery, remote sensing, and AI-enabled analytics are rapidly improving the accuracy and affordability of MRV systems, making it easier to measure outcomes at scale and unlock climate-linked finance for farmers.Policy alignment will also play a key role. Even partial shifts toward incentivising sustainable practices can catalyse broader systemic change when combined with private investment. The next revolution in Indian agriculture will not be driven by inputs alone but by how effectively India aligns finance, markets, and partnerships to regenerate the systems that sustain it.Rohilla is CGM, Department of Climate Action and Sustainability, NABARD. Bora, Global Director, Regenerative Food Systems, The Nature Conservancy. Gupta, senior manager, natural capital and carbon markets, Nature Conservancy India Solution(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)