With the Union Budget just around the corner, expectations are running high across sectors. From relief for the middle class and measures to curb inflation, to increased spending on climate resilience, the Budget is expected to signal how the government plans to respond to economic pressures.
Renewable energy in India continues on a strong growth trajectory, supported by focused policy, regulatory and fiscal initiatives of the Government of India.The sector is steadily progressing toward achieving national green energy and net-zero goals and the industry deeply appreciates the government’s sustained commitment across generation, transmission, and manufacturing in this industry.
For the Union Budget 2026, the renewable energy industry expects continued policy momentum along with targeted strategic interventions to enable long-term self-sufficiency, cost competitiveness, and energy security across the entire green energy value chain.
Here is what the industry speculates:
Sharing his perception on India’s EV Ecosystem, Ajinkya Firodia, Vice Chairman & Managing Director, Kinetic Watts & Volts Ltd, says, “ The sun has truly risen over India’s electric mobility industry. Supported by timely and forward-looking government initiatives, India is emerging as a shining example of accelerated EV adoption—an imperative transition given our environmental challenges and urban pollution levels.
India’s EV adoption has been fundamentally driven by value creation: lower operating costs through fuel savings, reduced maintenance, and the integration of smart, connected technologies. As we look ahead to the upcoming Union Budget, there is strong hope that the Government of India will continue to reward EV consumers by extending flagship initiatives such as the PM E-Drive policy, while further enhancing incentives for citizens who are embracing cleaner and future-ready technologies.
To offset fiscal impact, the government could consider a calibrated pollution-linked tax (similar to say, the “sin” tax on cigarettes, which are also bad for health) on ICE emission vehicles. Additionally, higher incentives for consumers willing to scrap older ICE vehicles and transition to EVs would significantly popularise EV usage iand contribute meaningfully to pollution reduction—an urgent national priority.
At the same time, the EV ecosystem must recognise and support manufacturers who have the courage to invest early. A dedicated PLI framework for startups and mid-scale entrepreneurs is essential—one that empowers Indian companies to innovate and compete in an industry dominated by global giants, while strengthening domestic manufacturing capacity.
The recently announced ₹1 lakh crore RDI fund stands out as an exemplary step in encouraging deep-tech research and innovation. It deserves special appreciation as part of the Hon’ble Prime Minister’s vision for building a truly Atmanirbhar Bharat. This initiative has the potential to catalyse breakthrough technologies—reducing dependence on rare earths and imported lithium cells, while fostering sustainable, next-generation solutions.
In addition, targeted support for export-oriented manufacturers is critical to counter competitiveness pressures arising from global geopolitical uncertainties and tariff wars. Incentivising exports will help Indian companies remain resilient and globally relevant. Finally, a strong push for education and skill development is essential to retain India’s extraordinary talent within the country. The future of innovation, manufacturing, and leadership clearly belongs to India—and empowering our youth at home will be the cornerstone of that future.”
Manish Rathi, Co-founder & CEO, IntrCity SmartBus says, “As we look toward the 2026 Union Budget, India’s intercity mobility ecosystem is at an inflection point. Over the past year, the industry has seen growing passenger preference for organized, reliable and experience-led bus travel – especially on medium and long-distance routes. While continued investment in highways remains critical, the next phase of growth must focus on passenger infrastructure and operational efficiency.
Industry-wide, there is a strong consensus on the need for modern, airport-style bus terminals along key national corridors- integrated hubs designed with safe and controlled boarding zones, enhanced security measures, clean restrooms, and quality food facilities. Such infrastructure significantly improves passenger safety and overall travel experience, while also strengthening the viability of shared mobility as a reliable and credible alternative to private vehicles.
With the right fiscal incentives and public-private collaboration, Budget 2026 can accelerate India’s transition to a more sustainable, organized and future-ready intercity mobility ecosystem.”
Talking about the railways sector, Manish Rathi, Co-founder & CEO, RailYatri comments, “The railways have demonstrated strong execution momentum over the past year, with visible progress across safety upgrades, capacity enhancement, infrastructure modernisation and passenger-focused improvements. This reinforces confidence that large-scale transport investments can be delivered efficiently when backed by clear intent and sustained funding.
As we look ahead to the 2026 Union Budget, the opportunity lies in building on this foundation by prioritising integration and experience. From an industry standpoint, the next phase of railway growth should focus on seamless multimodal connectivity – where trains, intercity buses and urban transit systems work together to enable predictable, end-to-end journeys for passengers. Continued emphasis on station modernisation, first- and last-mile connectivity, and digitally connected transport hubs will be critical in unlocking the full potential of rail travel.”
Speaking on the expectations from the upcoming Union Budget 2026, Shivam Budhiraja; an Automotive and Finance Content Creator and Co-Founder of Team Car Delight and Detailing Notch says, “Last year’s move to simplify tax slabs by removing exemptions was a step in the right direction, but we now need that logic applied to green mobility. For 2026, the real game-changer would be reducing GST on Hybrid Cars. Hybrids are often taxed as high as luxury petrol cars despite saving significant fuel. We expect a merit-based tax regime that rewards technologies like Plug-in Hybrids (PHEVs) – cars that use both petrol and EV charging. Lowering this tax will make fuel-efficient, sustainable mobility truly accessible for the Indian middle class.”
“As the Union Budget approaches, after the successful and welcome implementation of GST 2.0, the industry will be looking for policy continuity and long-term clarity. Sustained support for domestic manufacturing and increased allocation for road and transport infrastructure will be key priorities. Rationalising the inverted duty structure for EVs will strengthen domestic manufacturing and competitiveness, and will further accelerate India’s transition to sustainable mobility. Continued focus on building the EV ecosystem, alongside measures that support household disposable incomes, will be essential to sustain demand momentum and reinforce the sector’s role in India’s broader economic growth,” said Piyush Arora, MD & CEO of Skoda Auto Volkswagen India.
Kuldeep Bhan, Group President – Global Metallurgy Business, Neterwala Group, outlining the industry’s expectations from the forthcoming budget, comments, “Ahead of the Union Budget FY 2026-27, the Neterwala Group advocates for a resilient metallurgical framework to drive ‘Atmanirbhar Bharat.’ We urge strategic measures to bolster raw material security, including duty exemptions on ferro-nickel. Targeted support for MSMEs supplying defense, aerospace, and energy sectors will strengthen our industrial base, enabling small-scale innovators to integrate seamlessly into high-integrity global value chains and foster inclusive national prosperity.
Amid the current geopolitical volatility and rapid global shifts, as a major growing economy, India’s budget must diversify exports beyond single markets to penetrate diverse world markets effectively.”
Meanwhile, Kushagra Nandan, Co-Founder, LNK Energy shares, “The Government has been very supportive of the Renewable sector. While existing policies have successfully driven capacity expansion and catalysed domestic manufacturing, sustained investor confidence is built on policy stability and assured payment mechanisms. Hence, the Government should continue with the schemes that drive investments in manufacturing and provide payments security for the RE generators. Also, as the generation continues to scale, greater emphasis must be placed on sprucing up grid infrastructure and enabling long-duration storage solutions. Without these systemic enablers, the ability to absorb higher volumes of renewable energy could become a limiting factor.”
“Through the ambitious Viksit Bharat mission, the government’s vision to transform India into a developed nation by 2047 is no longer a distant aspiration but a strategic roadmap being executed today.
As we look toward the Union Budget, continued and targeted policy support will be the essential driver to accelerate technology-led manufacturing and deepen India’s advanced engineering capabilities. By evolving frameworks like the Production Linked Incentive (PLI) schemes and introducing dedicated Engineering R&D tax offsets, the government can effectively de-risk the industry’s transition to high-tech, precision production.
Strategic, long-term policy consistency is vital to attract the capital required for Industry 4.0 integration, robotics, and AI-driven automation. By strengthening infrastructure and export competitiveness through these focused measures, companies can scale innovation rapidly, building the globally competitive edge necessary to lead the next era of high-quality, future-ready industrial growth,” says Parag Satpute, MD & Group CEO, Greaves Cotton Limited.
“India’s clean energy sector has made remarkable progress, with solar capacity reaching over 132 GW and total renewable capacity surpassing 250 GW by 2025. The PM Surya Ghar: Muft Bijli Yojana and the scale-up to 100 GW of domestic solar PV module manufacturing are clear signs of momentum. However, as we move beyond capacity milestones, the real challenge now lies in building system-wide resilience and quality, especially when it comes to grid integration, storage, and sustainability. The upcoming Union Budget must prioritize scaling local manufacturing for Battery Energy Storage Systems (BESS), which is critical for grid stability and unlocking the next phase of renewable deployment. Clear, long-term fiscal incentives and tender visibility for BESS, alongside targeted support for recycling infrastructure for solar panels and batteries, will help establish a robust circular economy and reduce import dependence.
We also urge continued reforms in green financing, policy consistency, and execution predictability to encourage investment. Budget 2026 is a chance to shift the focus from expansion alone to building an integrated, future-proof clean energy ecosystem, one that sets the foundation for India’s leadership in storage, recycling, and sustainable manufacturing on a global scale,” added Dr. Avishek Kumar, Founder, Sunkonnect and Global climate tech entrepreneur
“As India’s EV revolution gains momentum, we’re facing a looming battery waste crisis that nobody’s talking about enough. In the previous year, the government laid a strong foundation for the battery circular economy, through duty cuts on waste batteries and critical minerals, as well as major recycling incentives, this year’s Union Budget is expected to take the next big step. The Union Budget 2026-27 needs to address this head-on. Our biggest task is meaningful GST reform, reducing tax rates on battery recycling services and recycled battery products to make the circular economy financially sensible, not just environmentally correct. Right now, it’s cheaper to dump batteries than recycle them, which is absurd. We need tax incentives for setting up recycling infrastructure, subsidies for collection networks, and policies that favor recycled materials in new battery manufacturing. Extended Producer Responsibility must come with real accountability, not just paperwork,” commented Avnish Bagaria, Co-Founder, NavPrakriti.
Commenting on the focus on in-house technology & equipment development, Surendra K Gupta, Executive Director and CFO, AMPIN Energy Transition says, “The government should place strong emphasis on in-house development of cutting-edge solar technologies, enabling India to achieve self-reliance in a shorter timeframe and indigenize next-generation technologies. In addition to this critical, solar, cell & module manufacturing equipments should be brought under the PLI framework. This support may subsequently be extended in a phased and structured manner to wafer and ingot manufacturing equipments. India already possesses strong equipment manufacturing capabilities across multiple industrial sectors. Leveraging these capabilities, coupled with indigenous technology development, can rapidly position India as a globally competitive and self-reliant solar manufacturing hub.
Clarity on Delayed PPAs and PSAs
As of January 2026, over 45 GW of renewable energy capacity in India is facing large delays in signing Power Purchase Agreements (PPAs) and Power Sale Agreements (PSAs), with developers. This uncertainty has raised serious concerns among investors and lenders. The industry requests the government to provide clear confirmation in the budget that these PPAs and PSAs will be signed expeditiously.Such assurance will significantly improve sectoral sentiments and catalyse increased inflows of both equity and debt into India’s renewable energy sector.
Strengthening Green Transmission Infrastructure
The industry appreciates the increased budgetary allocation and policy focus on Green Energy Corridors. Continued emphasis with higher allocations and faster execution is critical to ensure timely grid connectivity for upcoming renewable capacity.
Additionally, procedures and guidelines at the state level for grid connectivity and charging infrastructure should be further streamlined to ensure faster approvals, seamless evacuation, and immediate power injection upon physical commissioning of projects.
PLI for BESS Manufacturing
“Solar and BESS Manufacturing” to be re-categorized into “Infrastructure” category of RBI for ease of financing and re-financing. A dedicated PLI scheme for BESS manufacturing—similar to solar—should be introduced, encouraging local integration of components such asContainers, HVAC systems, Cabling, Fire-fighting systems. Only Lithium-ion cells, which are currently not manufactured at scale in India, should be permitted for import under this scheme.
Approved List of BESS Integrators (ALBI)
An Approved List of BESS Integrators, on the lines of ALMM for solar modules, should be introduced. This will ensure grid-connected BESS assets meet quality and safety standards, minimize systemic risks to the electricity grid and Improve investor and lender confidence.
Lower Cost of Capital & Priority Sector Lending
India is estimated to require USD 200+ billion in investments by 2030 to meet its clean energy targets. Access to competitively priced capital will be critical.The industry requests the inclusion of renewable energy projects under Priority Sector Lendingand Re-introduction of lower TDS rates on interest for ECBs and Rupee-denominated bonds. These measures will materially reduce financing costs and accelerate project deployment.
Extension of ALMM for Solar Cells
Considering manufacturing of solar cells in the country is still picking up and with an increasing demand for Solar cells &supply demand mismatch, government should consider exceeding its target to introduce ALCM for cells for a further period of 2 years.
Extension of ISTS Waiver
Interstate charges on power transmission through ISTS connectivity are waived till 2025. This should be further extended over the next 5 years to give a steeper boost to C&I segment which has large ISTS opportunities.
Concessional Corporate Tax Rate for Manufacturing
The concessional 15% income tax rate for new manufacturing entities in the renewable energy sector should be reintroduced in Budget 2026 and to be extended for a minimum of five years.
Exclusion from Deemed Dividend Tax
Renewable energy companies should be excluded from deemed dividend tax provisions in cases where loans or advances are provided by SPVs to shareholders.This will enable optimal capital utilization within project groups.
Reduction of GST on BESS
Lower GST on BESS and related products from existing18% to 5%. BESS enables grid stability and allows more RE to be integrated into the grid. Lower GST will accelerate adoption, encourage domestic manufacturing, support job creation, exports, and emissions reduction.
GST Exemption on Corporate Guarantees
Exemption of GST on Corporate Guarantee for renewable energy companies wherein Corporate Guarantee is provided by Holding Company to lenders in respect of funding obtained by SPVs.”
Arif Aga, Director at SgurrEnergy, adds, “As India progresses toward its 500GW renewable energy target by 2030, the Union Budget presents an important opportunity to strengthen the foundations for reliable large renewable deployment. Beyond capacity addition, focus must shift to grid readiness, storage integration, domestic manufacturing, and execution quality.
From an industry perspective, continued policy support for transmission infrastructure, including Green Energy Corridor, incentives and emerging technologies and support for FDRE and hybrid projects will be critical for system stability. Greater clarity on long-term market mechanisms for storage, along with streamlined approvals and faster execution timelines, would significantly improve project bankability and delivery certainty.
Equally important is sustained investment in data-driven planning, resource assessment, and independent technical oversight. These elements play a vital role in reducing project risk, improving performance outcomes, and attracting long-term capital into the sector.
A budget that balances scale with reliability and execution discipline will help India maintain momentum while building a power system that is both sustainable and robust over the long term.”
“As India’s EV and mobility ecosystem enters its next phase of scale, the Union Budget must shift from adoption-led incentives to long-term competitiveness. EVs currently account for 6–7% of total vehicle sales, with electric two- and three-wheelers driving over 90% of current volumes. Achieving the 30% EV penetration target by 2030 will require sustained policy support for domestic manufacturing, innovation, and startup-led execution. EV and mobility startups particularly across batteries, charging, fleet operations, and mobility platforms remain capital-intensive with longer gestation cycles. While India will need over USD 200 billion in cumulative EV and mobility investments by 2030, access to patient capital and operational efficiency remains uneven. The Budget should strengthen localisation incentives, expand credit support for EV startups, and rationalise GST on EV components and charging infrastructure. Equally important is easing on-road compliance and enforcement. With EV fleets and shared mobility operators scaling rapidly, digital, transparent challan and dispute-resolution systems can significantly reduce downtime, improve fleet efficiency, and lower compliance friction for startups and drivers alike.
A forward-looking Budget that aligns climate goals with industrial policy, regulatory clarity, and compliance-led digitisation can position India as a global hub for sustainable and efficient mobility,” says Himanshu Gupta, Founder & CEO at Lawyered.
Santosh Singh, Managing Director and Partner, Climate and Energy, Intellecap shares his perspectives on key economic and climate priorities. He adds, “Given the volatility in global climate finance and the wider geopolitical uncertainties, India can no longer rely on external flows to safeguard its large and vulnerable population. As the frequency and intensity of extreme weather events continue to rise, this year’s budget must place dedicated emphasis on rapidly scaling adaptation finance. Low income and climate exposed communities urgently need financial support and access to effective adaptation tools to cope with escalating risks.
At the same time, India’s cities are already confronting compounding threats like urban heat, flooding, and deteriorating air quality, which demand immediate investments in urban resilience.
The government must act as an ecosystem enablers that can reshape the economy and ensure climate finance is channelled towards priority adaptation sectors. Strengthening our existing institutions like NABARD, SIDBI and other financial institutions with mandates, capital and capacity to scale adaptation finance across agriculture, water, housing, and urban infrastructure.”
On the same lines, Pramod Kasat, Managing Director, Investment Banking, Intellecap adds, “As India looks to accelerate inclusive growth, the Budget provides an opportunity to strengthen MSMEs, which are increasingly relevant not just for employment but also for long-term economic resilience. From a capital-markets perspective, deeper risk-sharing frameworks, more effective credit enhancement, and greater use of catalytic capital can help improve bankability, crowd in private investment, and scale enterprises aligned with India’s transition priorities. Such measures would support sustainable growth while maintaining fiscal and financial stability.”
Anand Jain, Founder, Aerem Solutions, says “Union Budget 2025 came through big time for solar. They extended the ₹24,000 crore PLI for modules, cut duties on inverters and batteries, and threw ₹10,000 cr at large parks and rooftops. This was a game changer, and it is already firing up local manufacturing and making projects more doable. Heading into Budget 2026-27, the industry is hoping for, better incentives for high-efficiency TOPCon and HJT modules, simpler GST rules for EPC players to ease cash flow headaches, bigger viability gap funding for C&I rooftops, and dedicated grid slots for distributed solar to push us toward that 500 GW RE goal. At Aerem Solutions, we have already built the digital infrastructure to bridge the market’s trust deficit—integrating finance, procurement, design, and real-time monitoring.”
Vivek Tiwari, Angel investor and serial entrepreneur adds, “I am really counting on Budget 2026-27 to keep the ball rolling from last year, pumping healthcare spending up to 2.5-5% of GDP and doubling down on making med-tech stand on its own feet and think on extended PLI schemes for APIs, devices, and those deep-tech funding buckets that could make all the difference. We need GST zeroed out on life-saving kit, R&D tax credits cranked to 200% for health-tech startups, B2B rules slashed to cut costs 30-40%, RoDTEP exports boosted to 2%, and ₹5 lakh credit cards rolled out for 10 lakh micro-businesses that would let companies reach those hard-to-get rural spots and explode growth-wise.”
“We also need public-private tie-ups for AI diagnostics, more telemedicine through rural broadband at PHCs, and easy loans for Tier-III hospitals.” Mr. Tiwari further added, “Angel investors like me are pushing for relaxed SEBI regulations on health-tech funding and some real gap financing to get med-tech plants up and running. This kind of push could skyrocket India’s $200 crore med-tech world straight to unicorn territory, mixing breakneck growth with healthy profits at those 40% yearly clips.”