Budget 2025: India to strengthen climate resilience, energy transition with new initiatives

The government on Saturday announced new initiatives to strengthen climate resilience and energy transition in the Union Budget 2025-26, including National Manufacturing Mission, High Yielding Seeds Mission and Nuclear Energy Mission.

However, some experts felt the Budget fell short of delivering the bold and comprehensive climate action India urgently needs.

Presenting the Budget, Finance Minister Nirmala Sitharaman said the government will support domestic industries in making solar panels, EV batteries, wind turbines and electrolyzers while working towards producing 100 GW of nuclear energy by 2047.

It will also invest in small modular nuclear reactors (SMRs) and develop better seeds to help farmers deal with droughts, pests and changing weather patterns.

Sitharaman announced a National Manufacturing Mission to help small, medium and large industries grow under the 'Make in India' initiative.

"Given our commitment to climate-friendly development, the mission will also support clean tech manufacturing," Sitharaman said.

The focus will be on solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high-voltage transmission equipment and grid-scale batteries.

To further support local production, basic customs duties have been removed on cobalt powder, lithium-ion battery scrap, lead, zinc and 12 additional critical minerals -- a follow-up to the July 2024 policy that exempted 25 key minerals from import duties.

This measure is expected to lower input costs, secure raw material supply chains, and promote job creation in renewable energy and electric mobility sectors. It also has the potential to spur investments in domestic manufacturing and promote sustainable mobility in India.

To help Indian farmers deal with climate change, the government will launch 'National Mission on High Yielding Seeds'.

This mission will improve research and create better seeds that can produce higher yields, resist pests and survive extreme weather conditions.

Sitharaman said India plans to generate 100 GW of nuclear energy by 2047 as part of its clean energy transition.

"A Nuclear Energy Mission for research and development of Small Modular Reactors (SMR) with an outlay of Rs 20,000 crore will be set up.

At least five indigenously developed SMRs will be operationalised by 2033," she said.

To allow private sector participation, the government will make changes to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act.

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.