Union Budget 2026–27: Driving India’s Green Growth Agenda

The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, reflects a balanced approach between fiscal discipline and long-term economic growth, aligned with the vision ofViksit Bharat. While the budget does not introduce major changes in taxation, it clearly signals India’s commitment to sustainable development by prioritizing renewable energy, critical infrastructure, and clean technologies.

The budget lays the groundwork for accelerating India’s green energy transition by focusing on cleaner power generation, strengthening transmission systems, and encouraging domestic manufacturing across the energy value chain.

Renewable Energy at the Core of Growth

A major highlight of the budget is the strong push toward renewable energy. The allocation for the Ministry of New and Renewable Energy (MNRE) has been increased to nearly₹32,915 crore for FY 2026–27, marking an approximate30% year-on-year growth.

Special attention has been given to rooftop solar adoption through flagship schemes such asPradhan Mantri Surya Ghar: Muft Bijli Yojana, which received an enhanced allocation of₹22,000 crore. This reflects the government’s intent to expand solar usage among households and commercial establishments.

Overall, the budget reinforces solar power as a central pillar of India’s clean energy strategy.

Strengthening Solar Manufacturing and Supply Chains

To boost domestic production under the “Make in India” initiative, the budget introduces several incentives aimed at clean energy manufacturing:

Customs duty exemptions have been provided on selected machinery used in producinglithium-ion batteries and solar glass, helping reduce manufacturing costs and promote local supply chains. Reforms in the duty structure are designed to reduce dependence on imports and strengthen indigenous production.

These measures are expected to improve the competitiveness of Indian manufacturers and attract investments in advanced clean-tech industries.

Grid Modernisation and Energy Storage

For renewable energy to scale effectively, grid stability and storage solutions are essential. The budget extends duty exemptions on components required forBattery Energy Storage Systems (BESS) and lithium-ion battery manufacturing.

Such initiatives support grid-level storage, ensure better integration of intermittent renewable sources, and enhance overall energy reliability. Strengthened power infrastructure will also facilitate the growth of electric mobility and emerging clean technologies.

Electric Mobility and Charging Infrastructure

While no major new EV subsidies were announced, the budget continues to support the electric vehicle ecosystem through:

Long-term customs duty relief on key battery materials and critical minerals, helping lower the cost of EV manufacturing and charging infrastructure.

These policies indirectly promote EV adoption by making charging networks more affordable and improving supply chain efficiency.

Support for Hard-to-Decarbonize Industries

The budget also addresses sectors that face challenges in reducing emissions. Strategic funding has been allocated for technologies such asCarbon Capture, Utilisation and Storage (CCUS) over multiple years.

This will help industries like cement, steel, and chemicals transition toward cleaner production methods and align sustainability with economic growth.

Business Opportunities from the Budget

Conclusion

The Union Budget 2026–27 establishes a strong platform for India’s green energy future. It promotes renewable energy, storage technologies, and domestic manufacturing while maintaining fiscal discipline.

By strengthening essential but often overlooked areas such as power grids and energy storage, the budget creates long-term value for businesses, communities, and the environment. Organizations across the clean energy ecosystem can now leverage these policy initiatives to drive innovation, generate employment, and position India as a global leader in sustainable development.