India has 78.29 million hectare under forest and tree cover (Forest Survey of India, 2011) which is 23.81 per cent of the total geographical area of the country. However, the country’s forests are facing immense pressure due to unsustainable use of forest produce. This paper underlines that poverty and forest degradation are inextricably linked and curbing forest degradation requires convergence of various poverty alleviation policies and schemes. The role of local communities is vital in not only addressing the drivers of forest degradation but also enhancing carbon stock through conservation, protection and reforestation, i.e. the implementation of REDD+ in India. The paper concludes that while in the REDD+ readiness phase, a fund-based mechanism is recommended for supporting REDD+ activities, possibilities of a market-based mechanism could be later explored. The Green India Mission may present an opportunity to have a fund-based mechanism for financing REDD+ projects.