The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, has sent a resounding signal to the energy sector, prioritising renewable energy, clean technology manufacturing, and power sector reforms. The allocation of INR 1,500 crore to the solar power grid sector is a bold move that could catalyse significant growth in India’s solar infrastructure. This investment is poised to enhance grid stability, integrate more renewable energy sources, and drive innovation in solar technology.
The introduction of the National Manufacturing Mission is a strategic masterstroke. By supporting local production of solar PV cells, electric vehicle (EV) batteries, motors, controllers, electrolysers, wind turbines, very high voltage transmission equipment, and grid-scale batteries, the government is not only reducing imports but also building a robust, self-sustaining supply chain. This initiative could position India as a global hub for clean energy solutions, attracting investments and fostering technological advancements. The emphasis on domestic manufacturing aligns with the government’s ‘Make in India’ initiative, which has already shown potential in various sectors. The National Manufacturing Mission could accelerate India’s journey towards energy independence and sustainability.
The budget’s focus on electricity distribution and transmission is equally noteworthy. By incentivising power distribution reforms and strengthening transmission networks, the government is addressing long-standing challenges in the power sector. The additional borrowing allowance for states that undertake these reforms provides much-needed financial flexibility. This could lead to improved power distribution infrastructure, reduced transmission losses, and enhanced grid reliability. The reforms could also encourage states to adopt smart grid technologies, further optimising power management and distribution.
The launch of the Nuclear Energy Mission is another game-changer. With a target of 100 GW of nuclear energy by 2047, the government is diversifying India’s energy portfolio and enhancing energy security. The allocation of INR 20,000 crore for research and development of Small Modular Reactors (SMRs) is a forward-thinking move. SMRs, with their compact size and enhanced safety features, could revolutionise nuclear energy production. The government’s plan to amend nuclear laws to allow private sector participation could accelerate the development of nuclear energy infrastructure, driving innovation and cost efficiencies.
The tariff reductions on key renewable energy components are a welcome move. The reduction in import duties on solar cells and modules, as well as smart electricity meters, will make renewable energy more affordable. This could boost the adoption of solar energy and smart grid technologies, driving India’s transition to a low-carbon economy. The tariff reductions could also stimulate domestic manufacturing, as local producers gain a competitive edge.
Industry leaders have welcomed the budget, with many praising the government’s focus on clean energy and domestic manufacturing. Dr. Amit Paithankar of Waaree Energies Ltd. highlighted the budget’s potential to support the rapid growth of the renewable energy ecosystem. Vineet Mittal of Avaada Group commended the budget’s transformative vision for infrastructure, manufacturing, and power. Chirag Nakrani of Rayzon Solar expressed his commitment to expanding solar capabilities in line with the budget’s vision. Sumant Sinha of ReNew praised the budget’s support for clean tech manufacturing and nuclear energy. D. V. Manjunatha of Emmvee Group highlighted the budget’s focus on research and development in advanced solar technologies. Divyesh Savaliya of Onix Renewable Limited emphasised the budget’s role in fostering self-sufficiency in critical clean technologies. Vinay Thadani of GREW Solar praised the government’s commitment to renewable energy and the ‘Make in India’ initiative. Akshat Jain of KLK Ventures commended the government’s allocation to the solar power grid segment.
This budget could significantly shape the development of the energy sector. The focus on renewable energy, clean technology manufacturing, and power sector reforms could drive India’s transition to a low-carbon economy. The emphasis on domestic manufacturing could reduce imports, enhance energy security, and stimulate economic growth. The budget’s provisions for nuclear energy and research and development could revolutionise India’s energy landscape, positioning the country as a global leader in clean energy and innovation. The tariff reductions on key renewable energy components could accelerate the adoption of solar energy and smart grid technologies, further driving India’s transition to a sustainable future.