Green financing is one of the most notable tools in the development of sustainable development and ensuring climate resilience throughout developing economies. India is a rapidly developing nation and one of the toughest two challenges in front of India right now is how to achieve economic growth without compromising the environment. The past few years have seen a growing focus on transformative financial instruments like green bonds, sovereign green bonds, sustainability-linked bonds and ESG financing in India. This study reviews the importance of the transformative green financial instruments in India and its impact on attaining sustainable economic development. This study has descriptive and analytical research design where the secondary data is being gathered from Government Reports, Journal Papers, Climate Bond Initiative Reports and the publications of the SEBI. The results illustrates the contribution of Green Finance (GF) instruments towards renewable energy development and climate finance in India. There are many challenges to developing the GF ecosystem, including the problem of greenwashing, non-uniform green taxonomy, limited awareness, and regulatory problems. The study recommends effective implementation of Policy and disclosures on ESG to increase GF in India, and better institutional support to both GF and the adoption of GF.