As part of the Union Budget 2026-27, the finance minister has announced a set of measures spanning across higher customs duty reliefs, carbon capture support, transmission expansion for green corridors, public sector investments and restructuring of non banking financial institutions.

Carbon capture, utilisation and storage

The finance minister proposed an outlay of Rs 200 billion over the next five years to support carbon capture, utilisation and storage technologies (CCUS), with a focus on scaling deployment and improving technology readiness across five industrial sectors including power, steel, cement, refineries and chemicals.

Exemptions

The budget has proposed a series of customs and excise duty exemptions to support clean energy manufacturing and energy security. Basic customs duty (BCD) has been exempted on the import of sodium antimonate used in the manufacture of solar glass. BCD exemption has also been extended to capital goods required for processing critical minerals in India, as well as to capital goods used for manufacturing lithium-ion cells for batteries deployed in battery energy storage systems. Further, the existing BCD exemption on imports of goods required for nuclear power projects has been extended till 2035 and expanded to cover all nuclear power plants, irrespective of capacity.

Restructuring PFC and REC

The budget has proposed the restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to strengthen their role as long-term infrastructure financiers for the power sector. In parallel, the proposed Infrastructure Risk Guarantee Fund is aimed at crowding in private capital across the power value chain, including storage, by reducing financial risk exposure rather than relying on direct fiscal subsidies

Budgetary allocation

For 2026-27, the Ministry of Power’s budget is allocated at Rs 299.97 billion (as against Rs 215.88 billion in 2025-26).

For 2026-27, the Ministry of New and Renewable Energy budget is allocated at Rs 329.14 billion (as against Rs 265.49 billion in 2025-26).