The role of multilateral or international institutions that serve as donor agencies to support developmental efforts is increasingly prevalent among Indian states. While donor agencies are not dedicated solely to climate change development, they either have significant roles in dealing with climate change or they may have such roles in the future. This thesis examines what role donors play in climate change policy in Indian states and the central research question asks what determines the allocation of international climate finance among Indian states. Apart from the different domestic resources and mechanisms of climate finance in India, several climate-related projects or activities in India receive money from international funds or multilateral and bilateral agencies. International organisations such as the World Bank (WB), United Nations Development Program (UNDP) or Asian Development Bank (ADB), as well as bilateral aid agencies like Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) from Germany and Department for International Development (DFID) from the United Kingdom assist India in its developmental efforts. They operate concurrently alongside central and state ministries, non- governmental organisations (NGOs) and civil society organisations (CSOs) to implement climate-related projects and programmes in the country. To identify what determines the allocation of climate finance in Indian states, the thesis follows a triple themed framework focusing on donor interest, recipient need and recipient merit. The study shows that there is a high level of donor interest when investing in India’s climate efforts largely, due to the visibility and high-impact results that are produced. As for recipient need, whilst Indian states are in need of donor assistance to further their climate efforts, the climate finance distribution is administered by the centre. This division of power causes confusion on how the assistance is coordinated. In the Indian context, recipient merit seems to have no impact on the climate aid that is provided by donors to Indian states. There are cases of positive reinforcement where donors go back to preferred states as in the case of Odisha , but there is no evidence of any negative impact of donor aid to states due to any lack of merit. Donors allocate aid based on foreign relations, economic benefits and impact visibility, ultimately, it is the centre that decides the climate aid distribution to Indian states.