India’s climate policy is entering a decisive phase. The Union Budget 2026 allocated ₹20,000 crore for Carbon Capture and Utilisation (CCU) in hard-to-abate sectors. The focus has now shifted from ambition to execution. Whether driven by industrial carbon capture or carbon markets, credibility and measurability are now central to India’s climate strategy.Carbon (Getty Images/iStockphoto)India’s Carbon Credit Trading Scheme (CCTS), launched under the Energy Conservation (Amendment) Act, 2022, aims to place a price on emissions across energy-intensive sectors. By allowing firms that reduce emissions faster to trade surplus credits, the scheme turns emissions from an unpriced externality into a business decision. This encourages efficiency, cleaner fuels and low-carbon technologies.Yet carbon markets ultimately depend not on price alone, but on credibility. Each carbon credit must represent a real, measurable reduction. This is where Monitoring, Reporting and Verification (MRV) becomes indispensable. Carbon markets may revolve around trading and price signals, but their foundation is data integrity. Robust MRV ensures that capital is directed toward real emissions reductions, protecting credit integrity, creating a level playing field through standardised rules and supporting price stability by anchoring prices in reliable data.India has established the core MRV architecture under the CCTS, with defined roles across regulators, market administrators and accredited verifiers. Emission-intensity targets have been notified for select sectors, and reporting workflows are being operationalised under the Bureau of Energy Efficiency, supported by a central carbon market portal for emissions reporting and credit participation. Building on the Perform, Achieve and Trade (PAT) scheme, India is expanding its market-based framework while addressing gaps in data standardisation, baseline methodologies and verification capacity.These insights are shaping the phased rollout of the CCTS. Data maturity varies across sectors: some have established monitoring systems, while others are still developing basic capabilities. A sequenced approach allows processes to stabilise, institutions to mature and data quality to improve before broader expansion, reinforcing long-term credibility.As carbon markets grow and expand across sectors, MRV becomes more complex. As the market expands, MRV complexity increases significantly. Verification needs to happen faster, and the number of transactions increases. Manual or semi-automatic systems cannot handle this scale.As the market grows, MRV complexity increases, driven by higher data volumes and faster verification requirements. Manual systems cannot support this scale. Technology, through digital data capture, automated workflows, centralised registries and analytics, will be critical in reducing errors, preventing double-counting and strengthening oversight, enabling MRV to scale from early-stage compliance to a national market.Global experience shows that the effectiveness of carbon markets depends heavily on MRV design. Among existing systems, South Korea’s Emissions Trading System (K-ETS) offers relevant lessons.The Korean ETS operates with a disciplined, centrally governed MRV framework, anchored in a structured annual cycle in which emissions data is reported, independently verified and reviewed by the government before compliance is finalised. This ensures consistency and predictability. A defining strength is its digital integration. Reporting platforms, registries and trading systems are interconnected, enabling real-time tracking and reducing inconsistencies. Verifier governance is equally robust, with strict accreditation, oversight and liability provisions that reinforce accountability. Korea also emphasises granular measurement and prescriptive methodologies, strengthening data accuracy despite higher administrative effort. In contrast, the European Union ETS allows greater methodological flexibility, while China’s ETS prioritises scale through standardised methods and decentralised oversight. The key lesson for India is not replication, but prioritisation: Building strong MRV systems early, supported by digital infrastructure, governance and enforcement can enable smoother market expansion and strengthen long-term credibility.The importance of MRV extends beyond compliance markets into voluntary carbon markets (VCMs), where credit quality varies significantly across project types. While projects such as renewable energy benefit from relatively simple, metre-based monitoring systems, others present far greater complexity. For instance, cookstove projects carry a high risk of overestimated credits due to inconsistent and difficult-to-track usage patterns. Nature-based solutions face challenges related to baseline uncertainty, leakage and the reliance on manual biomass measurements. Soil carbon projects involve high costs and slow, complex measurement processes, making accurate verification difficult. Similarly, agriculture and forestry projects, including improved forest management (IFM) and regenerative practices, are affected by monitoring complexities and permanence risks. Even technology-driven interventions such as biochar and methane capture are not without challenges, particularly around equipment calibration and measurement accuracy. VCMs continue to face concerns around additionality, baseline inflation, permanence and verifier inconsistency. By strengthening MRV standards, digitisation of registries and tightening governance, drawing from systems such as the Korean ETS, low-integrity credits can possibly be avoided and greenwashing risks reduced. For India, MRV must be treated as a long-term strategic investment. Priorities include digitising reporting and registries, capacity-building for verifiers, standardised methodologies, tiered frameworks for MSMEs and stronger integration with national Green House Gas (GHG) systems and industrial policy. India has already made progress in linking MRV outcomes to incentives through Carbon Credit Certificates. However, further strengthening verifier governance, digital infrastructure and policy integration will be critical as the market expands.India’s carbon market is still evolving, and the decisions made today will define its long-term credibility. Strong, technology-enabled MRV systems will ensure integrity, enable accurate price discovery, attract investment and support future linkages with global carbon markets.Ultimately, carbon markets run on trust, and MRV is what makes that trust possible, turning climate ambition into measurable, verifiable and scalable outcomes.(The views expressed are personal)This article is authored by Charu Gupta, executive director and Aditya Nandanpawar, associate director, Deloitte India.