India wants to become the world’s next manufacturing superpower and an indispensable leader of the Global South. It seeks to attract global supply chains relocating from China, expand high-technology manufacturing, become a hub for artificial intelligence and semiconductor industries and strengthen its influence in global climate diplomacy.
Yet one of the greatest obstacles to these ambitions may not come from external rivals but from the deteriorating condition of India’s own environment.
Environmental governance has become an increasingly important dimension of national power. In today’s economy, industrial competitiveness depends not only on labor costs and market size but also on resilient infrastructure, reliable electricity, water security, public health and climate resilience. Countries that manage these challenges effectively gain advantages in investment attraction, advanced manufacturing and technological innovation. Those that fail increasingly risk undermining their own strategic ambitions.
The latest 2026 Environmental Performance Index (EPI) highlights this challenge. India ranked 176th out of 177 countries, ahead of only Laos, with an overall score of 22.46 out of 100, while Estonia topped the rankings with 74.79. India also ranked last among South Asia’s eight countries.
Compiled by researchers from Yale and Columbia universities, the index assesses environmental health, ecosystem vitality and climate change mitigation. Although aspects of its methodology have been questioned, India’s repeated poor performance – including its last-place ranking in 2022 – points to persistent structural challenges rather than an isolated statistical outcome.
The significance of these rankings extends far beyond environmental policy. They raise broader questions about whether environmental governance is becoming a strategic factor shaping economic competitiveness, geopolitical influence and long-term national resilience.
Environmental governance is becoming an economic advantage
As global competition shifts from low-cost manufacturing to resilient, technology-intensive supply chains, environmental governance is becoming a competitive advantage rather than merely a regulatory obligation. Investors increasingly evaluate countries not only on tax incentives and labour availability but also on climate risk, resource security, regulatory quality and infrastructure resilience.
For India, these issues are directly linked to its development strategy.
The country’s ambition to become a global manufacturing hub depends on attracting industries that require uninterrupted electricity, secure water supplies, efficient logistics and healthy urban environments. Electronics, pharmaceutical production, semiconductor fabrication, artificial intelligence infrastructure and hyperscale data centers all depend on reliable environmental infrastructure. Semiconductor fabrication plants alone require enormous quantities of ultra-pure water and continuous power supplies.
As these industries expand, environmental resilience becomes an increasingly important determinant of investment decisions.
Collectively, India’s environmental challenges increasingly intersect across labor productivity, industrial policy, energy security and climate resilience. Persistent air pollution raises healthcare costs and reduces workforce productivity. Heatwaves disrupt manufacturing, construction and logistics while increasing electricity demand. Water stress threatens both agricultural production and industrial expansion, particularly in rapidly growing economic corridors. Climate-related disruptions also place additional pressure on transport networks, energy systems and urban infrastructure.
These pressures should not be viewed separately. Together they shape India’s economic resilience as much as its environmental future.
Asia’s green competition is intensifying
Environmental governance is also becoming part of strategic competition across Asia.
China has spent years investing in pollution control around major manufacturing regions after environmental degradation began affecting productivity, public health and social stability.
Vietnam increasingly promotes itself as a resilient manufacturing destination for companies diversifying production beyond China.
Indonesia is linking sustainable mineral processing to its ambitions in electric vehicle and battery supply chains.
Each country faces significant environmental challenges of its own. Yet they increasingly recognize that environmental performance influences competitiveness in global markets. The contest for investment is no longer determined solely by wages or tax incentives. It is also shaped by infrastructure resilience, regulatory credibility and sustainability standards.
India’s challenge is particularly significant because its economic ambitions extend well beyond traditional manufacturing. New Delhi aims to become a major destination for artificial intelligence, cloud computing, digital infrastructure and advanced electronics.
These industries consume enormous amounts of electricity, require sophisticated cooling systems and depend on secure water supplies. Reliable environmental infrastructure is therefore becoming an economic asset rather than simply an environmental objective.
From domestic policy to foreign policy
Environmental performance increasingly influences foreign policy and international economic relations.
Global investors now incorporate environmental, social and governance (ESG) considerations into investment decisions. At the same time, trade policy is increasingly being shaped by environmental and carbon-related standards. Mechanisms such as the European Union’s Carbon Border Adjustment Mechanism (CBAM) reflect a broader trend in which sustainability is becoming closely linked to export competitiveness and market access.
For India, these developments carry important strategic implications. The country seeks to position itself as a preferred destination for manufacturers relocating production, while simultaneously presenting itself as a leading voice of the Global South in international climate negotiations. Both ambitions depend not only on policy announcements but also on credible environmental outcomes.
India has made genuine progress in renewable energy and solar deployment. Initiatives such as the International Solar Alliance demonstrate meaningful diplomatic leadership, and these achievements should not be overlooked. Yet renewable energy expansion coexists with serious domestic environmental challenges. The 2026 EPI ranked India 174th in environmental health, 171st in ecosystem vitality, and 130th in climate change mitigation, suggesting uneven progress across different dimensions of environmental governance.
India is also the world’s third-largest emitter of greenhouse gases in absolute terms, although its per-capita emissions remain substantially lower than those of many developed economies. This distinction is important, but it does not diminish the need to improve environmental outcomes as economic growth accelerates.
Following the release of the 2022 EPI, the Indian government rejected the findings as based on “surmises and unscientific methods.” Some Indian scholars have likewise questioned aspects of the methodology, particularly its treatment of developing economies and historical emissions. These criticisms deserve consideration.
However, methodological debate should not obscure the broader reality. Air pollution, biodiversity loss, groundwater depletion and environmental degradation are well documented by Indian researchers and international scientific institutions alike. The appropriate response is not to dismiss uncomfortable evidence but to strengthen governance and implementation.
A strategic test for India’s rise
Throughout history, rising powers have often been constrained as much by domestic weaknesses as by external rivals. In the twenty-first century, environmental governance is emerging as one of those defining tests.
India possesses enormous advantages: a large domestic market, a young workforce, expanding technological capabilities and growing diplomatic influence. Whether these strengths translate into sustained geopolitical leadership will depend partly on how successfully the country reconciles rapid economic growth with ecological resilience.
Cleaner air, secure water resources, resilient infrastructure and healthy ecosystems are no longer simply environmental aspirations. They are strategic assets that shape productivity, investment, industrial competitiveness, technological innovation and international credibility.
The 2026 Environmental Performance Index should therefore be viewed not as the story itself but as a warning signal. Its precise methodology will continue to be debated, as all international indices are. Yet repeated weak performance across multiple editions suggests that India’s environmental challenges are structural rather than temporary.
India’s future as a leading global power will ultimately be determined by far more than its position in any international ranking. But in an era where economic competitiveness, technological leadership and geopolitical influence are increasingly linked to sustainability, environmental governance has become a central measure of strategic resilience. India’s ability to reconcile rapid development with ecological sustainability may shape not only the well-being of its citizens but also the credibility of its claim to global leadership.
Saima Afzal is a researcher specializing in South Asian security, counterterrorism, and broader geopolitical dynamics across the Middle East, Afghanistan, and the Indo-Pacific. Her work examines strategic affairs and evolving patterns of regional conflict. She is currently a research scholar at Justus Liebig University, Germany.
