Union Budget 2026: Finance Minister Sitharaman pushes energy transition

New Delhi: Aimed at accelerating energy transition and enhancing energy security, the Centre has proposed customs duty exemptions for lithium-ion batteries used in battery energy storage systems (BESS) and sodium antimonate used in solar glass manufacturing.

“I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium-ion cells for batteries to those used for manufacturing lithium-ion cells for battery energy storage systems as well,” Union Finance Minister Nirmala Sitharaman said in her Budget speech.

She also proposed to exempt basic customs duty on the import of sodium antimonate for use in the manufacture of solar glass. Currently, a 7.5 per cent basic customs duty is levied on sodium antimonate.

The Finance Minister further announced a scheme to promote Carbon Capture, Utilisation and Storage (CCUS) with an outlay of Rs 20,000 crore.

The Budget outlay for the Union Ministry of New and Renewable Energy has been set at Rs 32,911 crore, of which more than Rs 30,000 crore is allocated for solar energy, underscoring the government’s strong push for renewable energy.

The government has increased the Production-Linked Incentive (PLI) allocation for the automobile industry to Rs 5,939 crore in 2026-27 to support the domestic production of electric vehicles (EVs).

The PLI scheme, aimed at boosting production of EVs and EV components, was allocated Rs 2,818 crore in 2025-26.

Union Renewable Energy Minister Pralhad Joshi said the Budget aims to accelerate grid-scale energy storage and enable seamless integration of renewable energy into the grid.

He noted that by extending the Basic Customs Duty (BCD) exemption to capital goods used in the manufacturing of lithium-ion cells for batteries and Battery Energy Storage Systems (BESS), the Budget will help scale up grid-scale energy storage and facilitate better integration of renewable energy.

Additionally, the exemption of BCD on sodium antimonate used in the manufacture of solar glass will further strengthen the domestic solar manufacturing ecosystem, Joshi said.

Together, these measures reflect a strong commitment to building a resilient, self-reliant, and sustainable energy future for India, he added.

“The government’s strong focus on energy sustainability, with a Rs 20,000 crore outlay for carbon capture initiatives and duty reductions on select solar equipment components, reinforces India’s commitment to a scalable, lower-carbon growth pathway,” said Subahoo Chordia, CEO, EAAA Alternatives.