Key Announcements Made related to Energy and Environment:
- Announcement 1: ‘National Manufacturing Mission to boost Cleantech Manufacturing
Impact: India’s dependency on imports for clean tech sector is very high (70-85%) for solar components, EV batteries, EV motors, Electrolyzers etc. The mission will focus on strengthening the entire manufacturing ecosystem – from SMEs to large-scale industries – while ensuring policy support for investment and execution plans. This will lead to the development of a robust cleantech ecosystem locally, enhancing domestic value addition in the clean tech space – battery technology, solar energy, EHV transmission equipment, controllers & motors etc., thus significantly lowering dependency on imports of these components / equipment.
- Announcement 2: Nuclear Energy Mission to develop at least 100 GW of Nuclear Energy capacity by 2047 and outlay of INR 20,000 Crores for R&D of Small Modular Reactors (SMR)
Impact: As India aims to reduce emissions intensity by 45% by 2030, the sustainable development of electricity sector is the key pillars for India’s low carbon long term development strategy. India’s emission intensity cannot reduce only through solar, wind, hydro form of renewable energy. Also, power generated through these sources is expensive compared to the fossil-fuel based power.
Nuclear power is a reliable and clean alternative to coal and oil-based power generation energy and at the same time an affordable zero-emission clean energy source. The Indian government has initiated steps to increase the country’s nuclear power capacity from the current 8 GW to 22.5 GW by FY2032 ramping upto 100 GW by 2047.
Historically India’s nuclear sector has been regulated and only Govt. entities can generate and supply nuclear power. The proposed amendment of Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act would result in private sector participation, and development of local capability.
Additionally, the government’s special focus on Small Modular Reactors (SMRs)—a promising new generation of compact nuclear reactors offering cost-effective and scalable energy solutions—along with an INR 20,000 crore outlay for R&D, marks a significant step toward meeting India’s growing energy needs while ensuring safety and efficiency.
- Announcement 3: Tariff Reduction on Key renewable energy components and Smart meters
Impact: India still imports a significant portion (70-80%) of its domestic requirement of solar cells and modules (for pricing reasons) the levy of custom duties results in the solar project cost being expensive. While the announcement of National Manufacturing Mission focuses on enhancing local capability, innovation and domestic value addition, the reduction in customs duty on cells from 25% to 20% and solar modules from 40% to 20% would result in reduction of the solar project costs. India’s Smart Meter National Program (SMNP) aims to replace 250 Mn conventional meters with Smart meters for the purpose of reduce power theft, better power distribution efficiency and improving financial health of the DISCOMs. While the domestic smart meter suppliers enhance their capacity to meet the smart meter demand under SMNP, the reduction in BCD of smart meter from 25% to 20% makes these meters affordable for the consumers
Overall Impact: Positive
Overall Analysis & Perspective: The budget is progressive and forward-looking, aiming for the sustainable growth of the Energy sector. The policies announced, once implemented, would help in achieving the following:
- Balancing the energy mix to ensure sustainable long-term growth of the energy sector thereby driving Economic Growth through low carbon development
- Establish India as one of the leading Clean Tech equipment and component manufacturer in the world realizing the dream of ‘Make in India’ and ‘Atmanirbhar Bharat’, besides providing significant employment opportunities in manufacturing, R&D etc.
