Carbon accounting is one of the critical tools in the global fight against climate change, allowing a country to ensure accurate measurement, reporting, and verification of GHG emissions. For developing countries, such as India, carbon accounting provides both mega challenges and strategic opportunities. This paper examines the complex landscape of carbon accounting in India by analyzing institutional, technical, financial, and policy-related barriers obstructing the accurate and transparent management of carbon data. The key challenges pertain to the shortage of technical expertise, inadequate data infrastructure, fragmented regulatory frameworks, and lack of incentives for compliance, especially in the informal and unorganized sectors. Despite all these challenges, India also offers substantial potential for leading in novel and innovative approaches to carbon accounting through the use of digital technologies, public–private partnerships, and alignment with globally accepted mechanisms such as the Paris Agreement. The study accentuates the role of national initiatives in providing a facilitative environment for enhanced carbon accounting, such as the Perform Achieve and Trade (PAT) scheme, renewable energy targets, and corporate ESG mandates. Addressing these challenges and leveraging emerging opportunities, India can not only enhance domestic environmental governance but also strengthen its position in global climate negotiations. The paper concludes by offering strategic policy recommendations for establishing a robust, transparent, and inclusive carbon accounting framework tailored to the unique needs of developing economies.