The "saddest part" is that despite India acting on the Paris climate agreement, some countries were walking out of the deal, he added.
Mr Prabhu's comments come amid the uncertainty over the US role in the deal after President Donald Trump announced in June that his country was withdrawing from the Paris deal, arguing that it gives undue advantage to countries like India and China.
The world's third-largest carbon polluter, India along with more than 190 nations, reached a pact in December 2015 with an aim to prevent an increase in the global average temperature and keep it well below 2 degrees Celsius.
The deal, which replaced the 1997 Kyoto Protocol, was ratified in October 2016.
"Unfortunately, despite the fact that we had a good agreement, I would not say the best, some countries are questioning Paris (pact) itself... "Despite the fact that we acted, now some countries are walking out and that's the saddest part of it," Mr Prabhu said here at a conference on climate change.
India has not caused climate change, but is a victim of it, he added.
The commerce and industry minister made a case for creating markets for green products and channelising public money towards fighting climate change.
He said the world must also develop new ideas of semi-financial instruments which can promote technology transfers, global action and collaborative solutions.
"The IFC (International Finance Corporation) must think about the new concept of bringing in private capital as well as countries who are supposed to contribute to it, they must also contribute a substantial part of it so that we can blend it and make it an instrument which can actually promote ideas related to climate change," he added.
Mr Prabhu said the government is engaged in formulating a new industrial policy which will create new industries, linking India to global supply chains and increasing the share of manufacturing in the GDP to 20 per cent.
"We have a GDP of almost USD 2.5 trillion and in the next 7 to 8 years, we will be touching the USD 5 trillion mark. I have asked the industries that we must touch the GDP for manufacturing to at least 20 per cent of GDP, which means in the next few years' time, the GDP for manufacturing must touch the trillion dollar mark," he said.
On his upcoming visit to WTO Ministerial Conference in Buenos Aires, Argentina, he said that while economic growth is imperative, there is a need to ensure that it is sustainable in the long term and green growth will be the driving force going forward.