This chapter studied the development of the green bond market in India in the last 10 years (2015–2025) and observed an interplay between the growth and the systemic risk. Though the market has been effective in the mobilization of capital, long-term resilience is being undermined by significant risks. The key issue is associated with low liquidity, regulatory risks particularly due to the lack of a national green taxonomy and risks caused by potential greenwashing, as noted across independent research, regulatory reports and media analysis. The chapter analyzes the pivotal roles of regulatory bodies such as the SEBI, RBI and the GOI and the financial services industry that are key in addressing these challenges, as well as shaping the entire sustainable finance landscape. Based on an assessment of the market trends and policy frameworks, the chapter provides a set of recommendations to improve market integrity and reduce financial and reputational risks, as well as create a more robust sustainable finance environment that will be able to support ambitious Net Zero targets of India.