India's Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, is drawing attention as it places significant emphasis on advancing the country’s green energy sector. With renewed commitments to sustainability and the promotion of domestic manufacturing, the budget signals strong intentions to position India as a leader in clean energy and self-reliance.
This year’s budget saw the introduction of several transformative announcements, including the ambitious Nuclear Energy Mission, which aims to generate at least 100 GW of nuclear power by 2047. "To facilitate greater private sector participation, amendments to the Atomic Energy Act will also be introduced," Sitharaman stated, showcasing the government's strategy to bolster investments and innovation within the energy sector.
Vineet Mittal, Chairman of Avaada Group, emphasized the importance of this shift, stating it marks a historic transition toward long-term energy security and decarbonization. This mission significantly aligns with India’s net-zero ambitions set for 2070. The Finance Minister also pointed out committed investments for developing small modular reactors (SMRs)—Rs 20,000 crore has been earmarked for research and development, indicating the government’s focus on innovation.
The fiscal plan includes enhanced allocations for the renewable energy sector, with total budgetary support rising to Rs 26,549 crore for the Ministry of Renewable Energy, representing a 53% increase over the previous fiscal year. This financial boost is expected to support multiple initiatives such as rooftop solar adoption and cost reductions on solar products.
Another highlight from this year's budget is the National Manufacturing Mission, aimed at establishing India as a self-reliant hub for the production of clean technologies. This encompasses manufacturing solar PV cells, electric vehicle (EV) batteries, and grid-scale batteries. Sitharaman noted the initiative aims to boost local capabilities and reduce import dependency. "The mission will also support cleantech manufacturing to improve domestic value addition," she explained.
To strengthen the manufacturing ecosystem, the government has also exempted Basic Customs Duty on cobalt powder, lithium-ion battery waste, and several minerals deemed as pivotal for enhancing domestic production. This move is intended to improve cost competitiveness and stimulate investments aimed at advancing recycling technologies for secondary metal industries.
Experts laud this as a proactive step. Rishabh Jain, senior programme lead at CEEW, remarked on India's potential competitiveness in clean energy components due to the backward and forward integration facilitated by these budgetary measures. This is seen as a step to mitigate the risks associated with China’s dominance over the supply chain for cleantech.
The discourse on sustainable mining was equally progressive, as Sitharaman announced policies aimed at boosting the mining sector under the National Critical Mineral Mission. This includes introducing a state mining index to encourage the adoption of best practices across state departments, as outlined by Reddy, who highlighted its potential to promote efficiency, attract investments, and tap India’s mineral resources more effectively.
With the government's sustained efforts to recycle and recover valuable minerals from mining tailings, there is optimism among various stakeholders. These initiatives are part of India’s broader push to strengthen its strategic industries, which include defense and clean energy.
Importantly, the reforms indicate important progress toward realizing the goal of Aatmanirbhar Bharat (self-reliant India), leveraging both domestic resources and technologies to become less reliant on external sources. The government's commitment to enhancing research and development for efficient recovery processes is expected to fortify the nation’s mineral supply chains and support its aspirations of being competitive at the global stage.
Overall, India's Union Budget 2025 presents multifaceted approaches to tackling economic growth and energy sustainability challenges. It not only reflects the government’s strategy to navigate the post-pandemic economic recovery but also showcases its ambition to leapfrog toward future-focused solutions. By fostering innovation, enhancing manufacturing capabilities, and ensuring sustainable practices, the budget aims to create foundational shifts not just for the energy sector but the entire economy.
Looking forward, as India continues to advance its green energy initiatives and manufacturing prowess, industry leaders like Anujesh Dwivedi accentuate the significance of these steps, stating, "The focus on nuclear energy and clean technologies positions India on strong footing to meet its growing energy demands sustainably. The 100 GW target by 2047 is not just aspirational; it is imperative for the future we envision.”