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On 17 September 2026, 2,550 smallholder farmers in Punjab and Haryana began receiving India's first direct benefit transfer (DBT) payments for soil carbon credits.
Over Rs 2.9 crore is being paid, about Rs 3,000-15,000 per farmer, depending on the credits each field earned.
The credits come from the 'Aadi' programme of Grow Indigo, launched in 2019 with ICAR's technical guidance, and are verified under Verra's VM0042 methodology.
Rewarded practices: Direct Seeded Rice, reduced tillage and crop residue management during 2019-2022.
A tradable unit issued when a farming practice raises soil organic carbon or cuts farm emissions - such as methane from flooded paddy or smoke from residue burning. The gain is measured, independently verified against a methodology and only then issued as credits that buyers purchase.
Simple Analogy: The farmer is paid for a verified result, not for buying an input.
Build India's compliance carbon market, the Indian Carbon Market.
Key: Notified 28 June 2023; administered by the Bureau of Energy Efficiency under the Ministry of Power. The Aadi credits are voluntary-market credits outside it.
Reward voluntary environmental actions such as plantation and water conservation.
Key: Green Credit Rules notified by MoEFCC on 12 October 2023; green credits reward the activity, not a measured tonne of CO2.
Curb stubble burning in Punjab, Haryana, Uttar Pradesh and Delhi.
Key: Central Sector Scheme from 2018-19 subsidising machinery that works residue back into the soil.
The 2022 amendment empowered the Centre to specify a carbon credit trading scheme - the legal basis of the CCTS, 2023.
Governs carbon trading between countries (6.2 bilateral transfers, 6.4 UN-supervised mechanism). Voluntary soil credits such as these sit outside it unless authorised for such transfers.
Apex agricultural research body; gave technical guidance to Aadi.
Venue of the first payments; a pillar of the Green Revolution.
Non-profit that runs the Verified Carbon Standard; owner of the VM0042 methodology.
Implementing company running the Aadi programme; joint venture of Indigo Ag (USA) and Mahyco Grow.
GS Paper III > Agriculture - sustainable practices; Environment - carbon markets
General Awareness > Agriculture and green finance
Consider the following statements regarding carbon markets in India: Carbon credits can be generated by afforestation and renewable energy projects. India has launched a domestic voluntary carbon market. Carbon markets are monitored under the Income Tax Act, 1961.
Answer: Only 1 and 2 are correct
Market where private buyers purchase credits certified by standards such as Verra, with no legal obligation.
Sowing paddy seed directly in the field, skipping nursery and transplanting; saves water and cuts methane.
Verra methodology for improved agricultural land management, counting soil carbon gains and emission cuts.