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					</table>The Union Budget 2026 has provided a new focus to India’s renewable energy strategy, moving from capacity addition to developing a sustainable, resilient domestic clean energy ecosystem, with energy storage systems as the key pillar.
Industry stakeholders across the renewable energy value chain have broadly welcomed the government’s emphasis on battery energy storage systems (BESS) to manage intermittency and strengthen grid reliability.
In Budget 2026, the <a href="https://www.mercomindia.com/big-push-for-solar-evs-critical-minerals-and-strategic-manufacturing-in-budget-2026" target="_blank" rel="noopener">allocation</a> for the solar sector rose to ₹305.39 billion (~$3.33 billion), up from ₹242.24 billion (~$2.64 billion) in the previous year.
Support for decentralized and rooftop solar also increased significantly. Funding for the Pradhan Mantri Krishi Urja Suraksha evam Utthaan Mahabhiyaan (PM-KUSUM) more than doubled to ₹50 billion (~$545.33 million) from ₹26 billion (~$283.57 million), while the allocation for the PM Surya Ghar: Muft Bijli Yojana increased to ₹220 billion (~$2.39 billion) from ₹200 billion (~$2.18 billion).
At the same time, the National Green Hydrogen Mission saw its allocation double from a revised outlay of ₹3 billion (~$32.72 million) in FY 2025–26 to ₹6 billion (~$65.44 million).
In contrast, funding for wind and other renewable energy programs remained unchanged at ₹5.5 billion (~$60.09 million), indicating a clear prioritization of solar-led growth in the near term.
Push for Solar Over Other Renewables
Despite the inherent intermittency of solar power, the Budget provided stronger support for solar than for other renewable sources, signalling a continued policy preference for solar-led growth.
Kalpesh Kalthia, CMD, <a href="https://kosolenergie.com/" target="_blank" rel="noopener">Kosol Energie</a>, noted that the Budget reflects more than 30% growth in targeted fiscal backing for solar deployment, grid integration, and decentralized energy projects.
Prashant Mathur, CEO, <a href="https://saatvikgroup.com/" target="_blank" rel="noopener">Saatvik Green Energy</a>, added that the record ₹12.21 trillion (~$133.1 billion) capital expenditure outlay, coupled with a nearly 29% increase in funding for PM Surya Ghar, has created long-term demand visibility for the solar value chain. This clarity is vital for unlocking large-scale investments.
Shreya Mishra, CEO and Co-founder at <a href="https://www.solarsquare.in/" target="_blank" rel="noopener">SolarSquare</a>, said that residential solar remains the biggest focus in India’s renewable energy push, with nearly 70% of the Ministry of New and Renewable Energy budget and ₹220 billion (~$2.39 billion) under PM Surya Ghar now dedicated to the residential solar segment. “As India’s energy needs grow, decentralized power will be critical, especially when transmission and distribution infrastructure cannot scale at the same pace.”
Pankaj Aggarwal, CFO, <a href="https://kalpapower.com/" target="_blank" rel="noopener">Kalpa Power</a>, said that as the sector enters a phase of rapid scale-up, deeper structural reforms will be critical. He added that interventions in transmission and grid infrastructure, utility-scale energy storage financing, and GST rationalization are essential to strengthening project bankability and mitigating curtailment and integration risks.
The Budget 2026 also corrected inverted duty structures on semiconductors by raising customs duty on finished electronic goods, such as interactive flat panel displays, to 20%, while reducing duties on open cells and key components to 5% or nil.
Pawan Kumar Garg, Chairman and Joint Managing Director, <a href="https://www.fujiyamautlsolar.com/" target="_blank" rel="noopener">Fujiyama Power Systems</a>, welcomed the launch of India Semiconductor Mission 2.0, saying that enhanced support for industry-led research and development and manufacturing would strengthen India’s semiconductor ecosystem and global competitiveness.
Continued Focus on Manufacturing
For solar manufacturing, the exemption from Basic Customs Duty on sodium antimonate used in solar glass production was seen as a critical move to strengthen domestic supply chains.
D.V. Manjunatha, Founder and CMD at <a href="https://emmvee.com/" target="_blank" rel="noopener">Emmvee Photovoltaic Power</a>, said the sector’s focus is now clearly moving from incentives to execution. “For companies that have invested early in domestic solar manufacturing, this policy consistency provides long-term confidence and visibility. The emphasis is now on operational excellence, cost competitiveness, and building depth across the value chain.”
Echoing this view, Mathur said the exemption would improve cost competitiveness and accelerate capacity creation in a strategically vital segment.
He added that for manufacturers, this budget is a green light to scale to multi-GW capacities and invest in deep backward integration.
Manufacturers believe that continued policy support could position India as a credible China+1 manufacturing hub and a globally competitive, export-ready clean energy supplier.
Energy Storage Takes Center Stage
Energy storage emerged as one of the most consequential themes of Budget 2026. Developers and manufacturers welcomed the extension of Basic Customs Duty exemptions on capital goods used for manufacturing lithium-ion cells for batteries deployed in BESS projects.
Devansh Jain, Executive Director, <a href="https://www.inoxgfl.com/" target="_blank" rel="noopener">INOXGFL Group</a>, noted that sustained policy support for energy storage would be critical to strengthening grid stability and enabling large-scale integration of renewables. He noted that duty relief for lithium-ion cell manufacturing and key solar inputs will support the development of integrated clean energy value chains.
Siddharth Bhatia, Managing Director, <a href="https://www.oysterrenewable.com/" target="_blank" rel="noopener">Oyster Renewables</a> and <a href="https://abenergia.co.in/" target="_blank" rel="noopener">AB Energia</a>, highlighted the importance of the government’s focus on rare-earth corridors and advanced manufacturing. According to him, securing domestic access to essential minerals is vital to scaling battery storage and power-electronics manufacturing.
Power Sector Reforms
Recognizing that generation-led growth must be matched by system-level reforms, the Budget announced measures to improve the financial health of power distribution companies.
The allocation for the reforms-linked distribution program increased to ₹180 billion (~$1.96 billion) from ₹160.2 billion (~$1.72 billion) in Budget 2025.
Shobit Rai, Co-Founder and Managing Director, <a href="https://www.prozealgreen.com/" target="_blank" rel="noopener">Prozeal Green Energy</a>, said incentivizing distribution reforms and augmenting intrastate transmission capacity would accelerate the adoption of advanced transmission infrastructure and energy storage systems.
The proposed restructuring of the Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) was also welcomed by the industry.
Tanmoy Duari, CEO, <a href="https://axitecsolar.com/en" target="_blank" rel="noopener">AXITEC Energy India</a>, said these changes would enhance financing capacity and unlock larger investment flows for renewable energy projects.
Rupal Gupta, Founder, Managing Director, and CEO at <a href="https://orianapower.com/" target="_blank" rel="noopener">TrueRE Oriana Power</a>, opined that the proposed restructuring of PFC and REC to improve credit velocity can further ease financing constraints for large, long-gestation clean energy projects.
Inclusion of CCUS
The Budget also expanded India’s decarbonization toolkit by proposing a Carbon Capture, Utilization and Storage (CCUS) program with an outlay of ₹200 billion (~$2.18 billion), aimed at hard-to-abate sectors such as power, steel, cement, and refining.
Rahul Munjal, Chairman and Managing Director, <a href="https://www.herofutureenergies.com/" target="_blank" rel="noopener">Hero Future Energies</a>, said the inclusion of CCUS acknowledges the need for credible transition pathways alongside renewables.
However, industry leaders cautioned that clarity of execution will be key.
Rupal added that clearer frameworks for contracting, certification, monetization, and long-term offtake would be essential to make CCUS projects bankable and to attract private capital at scale.
Boost for EVs
The electric mobility ecosystem also received a boost, with 35 capital goods for electric vehicle (EV) battery manufacturing added to the duty-exempt list.
Uday Narang, Founder and Chairman at <a href="https://omegaseikimobility.com/" target="_blank" rel="noopener">Omega Seiki Mobility</a>, said the budget pushed for advanced manufacturing, AI-led technologies, the growth of the electronics and semiconductor sectors, and the expansion of rare-earth and battery supply chains.
He added that the ₹100 billion (~$1.09 billion) SME Growth Fund and higher public CAPEX are also expected to strengthen the EV ecosystem significantly.

Industry Opines Budget 2026 Marks a Focus Shift to Stable Renewables

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					</table>The Union Budget 2025 has received strong industry support for its emphasis on clean energy, domestic manufacturing, and infrastructure development. The budget, presented to Parliament by Finance Minister Nirmala Sitharaman last week, has <a href="https://www.mercomindia.com/budget-2025-clean-energy-manufacturing" target="_blank" rel="noopener">introduced</a> several initiatives under the National Manufacturing Mission focused on strengthening India’s role in the global renewable energy supply chain.
Industry leaders have welcomed these measures, highlighting their potential to drive investments, job creation, and energy security.
Renewable Energy Expansion 
The budget’s focus on expanding India’s clean energy capacity and infrastructure development has been widely appreciated.
Vignesh Nandakumar, CEO Asia, <a href="https://enfinity.global/" target="_blank" rel="noopener">Enfinity Global</a>, commended the government’s commitment to domestic manufacturing of solar cells, modules, wind turbines, and grid-scale batteries, stating that these efforts will accelerate India’s progress toward its 500 GW renewable energy target. He also highlighted the importance of grid strengthening for seamless renewable energy integration.
Rajiv Ranjan Mishra, Managing Director, <a href="https://www.apraava.com/" target="_blank" rel="noopener">Apraava</a>, highlighted the boost to intra-state transmission capacity and electricity distribution reforms as crucial steps toward a more sustainable power sector. He emphasized that additional borrowing allowances for states will expedite energy sector modernization.
Naresh Mansukhani, CEO of <a href="https://www.junipergreenenergy.com/" target="_blank" rel="noopener">Juniper Green Energy</a>, emphasized that the allocation of ₹15 billion (~$172.10 million) to solar power projects (grid), combined with state incentives, will strengthen clean energy infrastructure in India. He also noted the increasing solar budget allocations as evidence of India’s long-term vision for renewable energy.
Sameer Gupta, Chairman of Jakson Group, noted that the budget’s ₹10 trillion (~$114.73 billion) commitment to new projects under the Asset Monetization Plan 2025-30 and ₹1.5 trillion (~$17.21 billion) for state capital expenditure would enhance India’s energy and infrastructure capabilities. He further stressed the role of infrastructure development in driving economic growth.
Strengthening Domestic Manufacturing 
The National Manufacturing Mission, focused on clean technology manufacturing, has received enthusiastic support from industry leaders.
N.P. Ramesh, COO and Co-Founder, <a href="https://www.orbenergy.com/" target="_blank" rel="noopener">Orb Energy</a>, praised the initiative for accelerating the domestic production of solar cells, EV storage batteries, and other renewable technologies, reinforcing India’s global supply chain position. He also pointed out that Industry 4.0 will create exciting opportunities for youth in cleantech innovation.
Simarpreet Singh, CEO, <a href="https://hartek.com/" target="_blank" rel="noopener">Hartek Group</a>, underscored the significance of indigenous production of high-voltage transmission equipment and deep-tech funding in positioning India as a leader in clean energy solutions. He stated that investments in deep-tech innovation would drive breakthroughs in solar and energy storage.
Pratik Agarwal, Managing Director, <a href="https://www.sterlitepower.com/" target="_blank" rel="noopener">Sterlite Power</a>, highlighted the focus on manufacturing high-voltage transmission equipment as a strategic move to bridge the global deficit and establish India as a leader in this segment. He emphasized that transmission and distribution remain the weakest links in India’s power sector.
Anmol Singh Jaggi, Chief Managing Director, <a href="https://www.gensol.in/" target="_blank" rel="noopener">Gensol Engineering</a>, stated that the mission provides the necessary policy certainty and execution framework for India’s long-term sustainability goals. He noted that cleantech manufacturing thrives on strategic government support.
Abani Jha, CFO, <a href="https://saatvikgroup.com/" target="_blank" rel="noopener">Saatvik Green Energy</a>, welcomed the support for domestic manufacturing of solar cells and modules, noting that reducing import dependency aligns with India’s self-reliance vision. He also emphasized that indigenous solar technology will be instrumental in India’s energy transition.
Amit Paithankar, Whole-Time Director and CEO, <a href="https://waaree.com/" target="_blank" rel="noopener">Waaree Energies</a> hailed the announcement of the National Manufacturing Mission, along with enhanced PLI programs and tariff rationalization for critical minerals, will support the rapid growth of the entire renewable energy ecosystem.
Battery Storage and Grid Integration
Recognizing the pivotal role of energy storage in renewable adoption, the budget includes measures to strengthen battery manufacturing and grid integration.
Nishant Sood, Managing Director, <a href="https://www.candi.solar/" target="_blank" rel="noopener">Candi Solar</a>, called for additional duty-based support to further scale battery storage, essential for maximizing solar energy adoption. He stressed that storage solutions must expand alongside solar deployment.
Vignesh lauded the reduction of basic customs duty (BCD) on lithium-ion batteries, stating that it will facilitate the deployment of energy storage solutions alongside renewables. He also noted that storage and renewables must progress together for a seamless energy transition.
Naresh emphasized the necessity of a resilient power infrastructure, particularly for regions like Rajasthan, Gujarat, and Uttar Pradesh, where solar energy adoption is rapidly growing. He pointed out that improved transmission networks will ensure reliability and efficiency.
Paithankar noted that the inclusion of lithium-ion battery manufacturing incentives and duty exemptions on key raw materials like cobalt and lithium will accelerate India’s emergence as a global hub for energy storage solutions, furthering the EV and solar industries.
DISCOM Reforms 
The budget prioritizes electricity distribution and financial stability of distribution companies (DISCOMs), ensuring efficient power delivery and grid modernization.
Mishra noted that incentives for States to improve distribution and transmission capacity will enhance the operational efficiency and financial health of power distribution companies. He also highlighted that the regulatory reforms would make the power sector more investment-friendly.
Girish Tanti, Vice Chairman, <a href="https://www.suzlon.com/" target="_blank" rel="noopener">Suzlon</a>, highlighted the necessity of an integrated energy ecosystem, combining wind, solar, batteries, and distribution reforms for a cost-effective clean energy transition. He stressed that national security depends on building local expertise in these industries.

Budget Reactions: Industry Applauds National Manufacturing Mission for Clean Energy

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