Budget 2025: India Unveils Climate And Energy Reforms To Boost Green Growth
The government aims to position India as a global leader in green technology and sustainable development while ensuring economic growth remains inclusive and climate-conscious.
The Indian government on Saturday announced a series of new initiatives in its Union Budget 2025-26, aimed at strengthening climate resilience and accelerating the country’s transition to clean energy. Finance Minister Nirmala Sitharaman, in her eighth consecutive budget speech, unveiled three major programmes—the National Manufacturing Mission, High Yielding Seeds Mission, and Nuclear Energy Mission—to bolster domestic industries, support farmers, and expand India’s clean energy capacity.
Push For Clean Tech Manufacturing
The National Manufacturing Mission, a key pillar of the government’s ‘Make in India’ initiative, will provide support to small, medium, and large industries involved in clean technology production. The programme is expected to drive investment and innovation in critical sectors such as solar panels, electric vehicle (EV) batteries, electrolyzers, and wind turbines.
"Given our commitment to climate-friendly development, the mission will also support clean tech manufacturing," Sitharaman said.
The government has also announced customs duty exemptions on key minerals, including cobalt powder, lithium-ion battery scrap, lead, and zinc, to lower input costs and strengthen raw material supply chains. This follows the July 2024 policy, which removed import duties on 25 critical minerals to encourage domestic production.
Hailing the budget, Anil Rawal, MD & CEO, of IntelliSmart Infrastructure said, “The Union Budget 2025 emphasizes the government’s strong commitment to meeting rising energy demands while staying true to its climate goals. A key highlight is the emphasis on strengthening electricity distribution, with plans to incentivize states to implement critical distribution reforms."
"This is a welcome step as it will encourage states to adopt measures like smart metering, which is the need of the hour for enhancing the overall systemic efficiencies of the power utilities and optimise electricity distribution. This also gives AMISPs a significant opportunity to contribute to power sector digitalization, while empowering grassroots consumers with access to affordable, reliable, and round-the-clock electricity, aligned with the vision of Viksit Bharat,” Anil Rawal added.
Farmers To Get Climate-Resilient Seeds
As part of its broader strategy to address the challenges of climate change and food security, the government will launch the National Mission on High Yielding Seeds. The initiative will focus on developing crop varieties that are more resistant to pests, extreme weather conditions, and droughts.
With India’s agricultural sector increasingly vulnerable to climate shifts, Sitharaman said the mission would provide better research funding and improve access to high-yield, climate-resilient seeds for farmers.
Nuclear Energy Mission: India Targets 100GW by 2047
In a significant policy shift, the government has set an ambitious target of 100GW of nuclear energy by 2047. As part of this transition, Sitharaman announced the creation of a Nuclear Energy Mission, with ₹20,000 crore allocated for research and development.
The programme will focus on Small Modular Reactors (SMRs), a next-generation nuclear technology that offers scalable and safer energy production. The government plans to have at least five indigenous SMRs operational by 2033.
To enable private sector participation in nuclear energy, amendments will be made to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, paving the way for greater investment and international collaboration.
Harjeet Singh, climate activist and Founding Director, Satat Sampada Climate Foundation, said that beyond brief mentions of boosting EV battery manufacturing and climate resilience in agriculture, the Budget falls short of delivering the bold and comprehensive climate action India urgently needs.
"It lacks a renewed commitment to scaling up renewable energy, tackling deadly air pollution, restoring ecosystems and safeguarding communities on the frontlines of the climate crisis," he said.
"With worsening environmental degradation and escalating climate threats, we need decisive, transformative action, not fragmented gestures," he added.
Saurabh Kumar, Vice President - India, Global Energy Alliance for People and Planet (GEAPP), said this year's Budget builds on India's aim to become a global leader in renewable energy.
"The National Manufacturing Mission will provide impetus to domestic production of clean technologies such as solar PV cells and grid-scale batteries. It will scale up the deployment of renewable energy and make India a crucial link in the global supply chain.
"The focus on implementing private sector-driven research, development and innovation will augment our capabilities to nurture innovative solutions for a people-positive energy transition," he said.
Hisham Mundol, chief advisor at the Environmental Defense Fund, said continuing the push for renewable energy and the prioritisation of safer nuclear not only reduces emissions from energy but also risks associated with diversifying the energy mix.
He said, "100 GW of safe nuclear power by 2047 is a strong target to pursue." Sunil Dahiya, founder and lead analyst, Envirocatalysts, said the Budget lacked a bold statement to reduce reliance on fossil fuels to decarbonise the energy sector.
However, he said a push for rooftop solar, reduced import duties on solar and battery components, investment in grid infrastructure, and initiatives like PM-eBus, AMRUT and Swachh Bharat are welcome steps.
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