Why Union Budget 2026 is a fillip to energy transition plans
Union budget 2026 gives a push to energy transition with a boost for coal gasification, PM Surya Ghar Muft Bijli Yojana, carbon capture technologies, critical mineral value chains, and battery energy storage systems
- Feb 1, 2026,
- Updated Feb 1, 2026 5:20 PM IST
Keeping in mind India’s energy transition roadmap, the Union Budget focused on securing battery ecosystems, critical minerals to boost green manufacturing, coal gasification and strengthening domestic solar manufacturing.
The budgetary allocation for the Ministry of New and Renewable Energy saw a 23% jump in FY26-27 over FY25-26, with a nearly 29% increase for the PM Surya Ghar Muft Bijli Yojana. The government has created much-needed visibility for large-scale investments across the solar value chains.
The coal ministry Budget got Rs 3,500 crore boost for coal gasification in the fiscal year 2027. Coal gasification is a modern energy conversion technology that transforms coal into a cleaner, more versatile form of fuel known as syngas or synthetic gas.
The Union Budget has focused on measures to strengthen domestic solar manufacturing, including duty exemptions on critical inputs like solar glass and sodium antimonate, which will reduce import dependence and improve supply chain resilience. Bringing customs duty to NIL on capital goods for lithium-ion cell manufacturing will further accelerate energy storage adoption, which is crucial for grid stability and renewable integration.
Prashant Mathur, CEO, Saatvik Green Energy, says the Budget 2026 sends a strong and well-balanced signal for India’s clean-energy manufacturing ecosystem and marks a major step forward for India’s solar manufacturing story.
“The extension of customs duty exemptions for lithium-ion cell manufacturing to battery energy storage systems directly strengthens both energy transition and energy security, while the exemption on critical inputs such as sodium antimonate for solar glass will improve cost competitiveness and accelerate domestic capacity creation in a strategically vital segment,” he said.
The Budget announced a Rs 20,000 crore commitment to Carbon Capture, Utilisation and Storage (CCUS) over five years in five carbon-intensive industrial sectors.
“It directly addresses the competitiveness challenge Indian industry faces under mechanisms such as the EU’s Carbon Border Adjustment Mechanism and provides a credible pathway for hard-to-abate sectors like steel and cement to remain globally competitive while decarbonising,” said Masood Mallick, Chairman, CII National Committee on Waste to Worth Technologies and Managing Director & Group CEO, Re Sustainability Limited.
Duty exemptions on capital goods for critical mineral processing, along with support for rare-earth corridors in mineral-rich states, will strengthen urban mining and large-scale resource recovery, he added.
Keeping in mind India’s energy transition roadmap, the Union Budget focused on securing battery ecosystems, critical minerals to boost green manufacturing, coal gasification and strengthening domestic solar manufacturing.
The budgetary allocation for the Ministry of New and Renewable Energy saw a 23% jump in FY26-27 over FY25-26, with a nearly 29% increase for the PM Surya Ghar Muft Bijli Yojana. The government has created much-needed visibility for large-scale investments across the solar value chains.
The coal ministry Budget got Rs 3,500 crore boost for coal gasification in the fiscal year 2027. Coal gasification is a modern energy conversion technology that transforms coal into a cleaner, more versatile form of fuel known as syngas or synthetic gas.
The Union Budget has focused on measures to strengthen domestic solar manufacturing, including duty exemptions on critical inputs like solar glass and sodium antimonate, which will reduce import dependence and improve supply chain resilience. Bringing customs duty to NIL on capital goods for lithium-ion cell manufacturing will further accelerate energy storage adoption, which is crucial for grid stability and renewable integration.
Prashant Mathur, CEO, Saatvik Green Energy, says the Budget 2026 sends a strong and well-balanced signal for India’s clean-energy manufacturing ecosystem and marks a major step forward for India’s solar manufacturing story.
“The extension of customs duty exemptions for lithium-ion cell manufacturing to battery energy storage systems directly strengthens both energy transition and energy security, while the exemption on critical inputs such as sodium antimonate for solar glass will improve cost competitiveness and accelerate domestic capacity creation in a strategically vital segment,” he said.
The Budget announced a Rs 20,000 crore commitment to Carbon Capture, Utilisation and Storage (CCUS) over five years in five carbon-intensive industrial sectors.
“It directly addresses the competitiveness challenge Indian industry faces under mechanisms such as the EU’s Carbon Border Adjustment Mechanism and provides a credible pathway for hard-to-abate sectors like steel and cement to remain globally competitive while decarbonising,” said Masood Mallick, Chairman, CII National Committee on Waste to Worth Technologies and Managing Director & Group CEO, Re Sustainability Limited.
Duty exemptions on capital goods for critical mineral processing, along with support for rare-earth corridors in mineral-rich states, will strengthen urban mining and large-scale resource recovery, he added.