The global imperative to address climate change has led countries like India to implement innovative carbon pricing mechanisms, creating a complex regulatory landscape for high-pollution industries. This qualitative study examines the multifaceted impact of carbon pricing on corporate financial performance in sectors critical to India’s economy. By analysing policy documents, corporate strategies, and industry reports, the research explores how carbon pricing shapes corporate profitability, investment decisions, and sustainability transformations. Drawing on data from government sources, industry analyses, and academic literature, the study reveals varied adaptation strategies among high-emission sectors, showing a nuanced relationship between emissions reduction and financial outcomes that challenges the notion of environmental regulation as merely a cost burden. It highlights strategic responses by leading Indian corporations, showcasing how regulatory challenges are being met with innovation and efficiency to preserve competitiveness. Ultimately, the research offers valuable insights into India’s climate transition by linking policy with corporate finance, and provides actionable recommendations for policymakers, investors, and business leaders, emphasizing the role of carbon pricing as a driver of innovation, operational excellence, and sustainable growth.