Mumbai Lagging in Green Building Adoption: Developers Seek Incentives

Green-certified buildings in Mumbai could see wider adoption if policymakers introduce faster approvals, tax rebates, and other sustainability incentives. Despite Maharashtra's efforts to promote sustainable construction, Mumbai continues to lag behind in the adoption of green buildings, largely due to the absence of development incentives available in other parts of the state.

Real estate industry representatives stressed that while green-certified buildings offer substantial environmental and economic benefits, stronger policy support is needed to accelerate adoption, particularly in Mumbai.

Buildings account for nearly 40% of global emissions. According to Gurmeet Singh Arora, Immediate Past National Chairman of the CII Indian Green Building Council (IGBC), buildings contribute nearly 38% to 40% of global carbon emissions, making the sector a critical player in climate action.

About 11% of emissions originate from construction materials, while nearly 28% come from operational energy use such as air-conditioning, lighting, and other building services. Green buildings are no longer optional; they are essential, Arora said.

India has emerged as the world's second-largest market for green buildings, with over 16 billion square feet of certified green building footprint. Arora noted that green-certified projects can reduce energy consumption by 40% to 80% and water usage by 30% to 60%, while some developments are capable of achieving net-positive energy and water performance.

He also challenged the perception that sustainable construction significantly increases project costs. In residential projects, an IGBC-certified building can cost 3% to 5% less due to efficient design and material optimization. In commercial developments, any marginal increase in upfront cost is generally recovered within months through lower energy and water expenses.

Mumbai's density limits FSI incentives. Arora pointed out that several states and urban regions encourage green construction through incentives such as additional Floor Space Index (FSI), faster approvals, and regulatory benefits. Across many parts of the Mumbai Metropolitan Region and Pune, developers can receive additional FSI ranging between 5% and 10% for adopting green building standards.

However, he cautioned that Mumbai's urban realities make such incentives more complicated. Mumbai is already facing intense pressure on roads, water supply, sewerage systems, and electricity infrastructure. Additional FSI may not be the most suitable incentive because every increase in built-up area adds further stress on already stretched civic services.

Despite the absence of FSI incentives, Arora said most leading developers in Mumbai are increasingly adopting green building practices because of lower operating costs, better occupant health, and higher long-term asset value.

NAREDCO seeks incentives for developers and buyers. Hitesh Jadavji Thakkar, Vice President of NAREDCO Maharashtra and Partner at Prem Group, said green buildings are no longer a luxury but a necessity for India's sustainable future. The cost difference between a conventional and a green building is marginal, while the long-term environmental, social, and economic benefits are substantial. Governments can accelerate adoption by offering additional FSI, faster approvals, fiscal incentives, and benefits for homebuyers.

He added that NAREDCO has already submitted representations to the Ministry of Housing and Urban Affairs seeking policy incentives for both developers and buyers of green-certified projects. Such measures will not only promote environmentally responsible construction but also help India achieve its climate and sustainability goals.

Certification alone is not enough: CREDAI-MCHI. Keval Valambhia, Chief Operating Officer of CREDAI-MCHI, said the green building discourse has become overly focused on certifications and ratings, while the larger sustainability challenge remains unaddressed. Green building certification is only the first step. The industry needs a holistic approach covering the entire lifecycle of a project—from planning and construction to operations and energy efficiency.

He noted that developers often face significantly higher costs when opting for environmentally friendly materials such as green cement, low-carbon concrete, and sustainable construction products. In many cases, sustainable materials cost three to four times more than conventional alternatives. If governments want large-scale adoption, there must be incentives such as property tax rebates or other support mechanisms that help bridge this cost gap.

Valambhia added that sustainability should be measured through actual outcomes such as reduced energy consumption, lower carbon emissions, efficient water management, and responsible material sourcing rather than certifications alone.

Less than 1% of buildings green-certified. Anand Gupta, Chairman of the Housing and RERA Committee of the Builders Association of India (BAI), said Maharashtra currently offers green building incentives in terms of extra FSI. Presently around 500 buildings have got green building certification, which is less than 1% of all buildings existing or under construction.

To improve adoption, he called for a wider range of incentives, including FSI benefits, tax rebates, and other concessions. Industry experts believe that while Mumbai's density constraints may limit the scope for additional FSI, alternative incentives such as faster approvals, property tax rebates, and financial benefits could help encourage sustainable construction and support the state's broader environmental goals.