Summary: India is at the cusp of a major urban transition. In less than twenty years, India’s urban population is expected to nearly double from 377 million today to over 600 million. Indian cities already contribute an estimated two-thirds of India’s GDP, and this number is expected to rise to 75% by 2031. With 70% of all new jobs expected to come from urban areas, accommodating a growing urban workforce will require large investments in new urban spaces. How prepared is India to deal with this rapid, inevitable urban expansion? The evidence on the ground suggests that the costs of India’s current pattern of urbanization are unsustainably high. Deep existing deficits in basic urban services such as housing, transit, water, sanitation and energy have led to a plethora of urban woes. These range from the economic, institutional and carbon costs of managing unplanned growth, congestion, poor quality of life, burgeoning slums and pollution levels that have come to threaten basic public health.

This paper reviews the current state of the literature on Indian urbanization to analyze existing urban development trajectories at the state level in order to understand the challenges Indian cities face as well as the opportunities available to them to adopt transformative urban processes that can foster inclusive economic growth that is also low-carbon. The paper explores the role of (urban) energy, multimodal transport, smart infrastructure, green buildings, water and urban finance to explore how and to what extent states are able to balance economic growth, urbanization and carbon emissions.

The paper argues that pathways of urbanization that can help India achieve its carbon commitments without compromising on growth are possible. A new growth model for Indian cities can be anchored around four core policy pillars: (1) promoting compact urban form centered on efficient public transport; (2) Reducing the energy intensity of urban industry; (3) investing in smart infrastructure, especially green buildings and resilient water networks; and (4) inducing innovation, especially in urban finance, mechanisms of urban inclusion (improving the quality of life and livelihoods of the urban poor) and institutions of governance and implementation.