New Delhi: Industry executives and ratings agencies said the Union Budget 2026–27 has provided long-term policy clarity for India’s clean energy manufacturing ecosystem, particularly across solar modules, battery cells and energy storage systems.
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“The Budget builds on India’s sustainability agenda,” said Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings Limited. “Customs duty exemptions in clean-energy areas, including battery storage components, solar inputs and nuclear projects would help speed up the transition.”
In her Budget 2026–27 speech, Finance Minister Nirmala Sitharaman announced a series of customs duty exemptions aimed at strengthening domestic clean energy 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 too,” Sitharaman said. She also announced duty relief for solar manufacturing inputs, stating, “I propose to exempt basic customs duty on import of sodium antimonate for use in manufacture of solar glass.”
These measures come alongside an increase in capital expenditure to Rs 12.21 lakh crore and a nearly 29 percent rise in allocation for the PM Surya Ghar Muft Bijli Yojana, which aims to expand rooftop solar adoption.
Ankit Jain, Vice President and Co-Group Head – Corporate Ratings at ICRA, said the measures could directly influence project tariffs.
“The exemption of the basic customs duty for capital goods for manufacturing lithium-ion cells for batteries as well as battery energy storage systems can aid tariff competitiveness of BESS projects,” Jain said, adding that continued support for PM Surya Ghar Muft Bijli Yojana and PM-KUSUM would support renewable capacity addition.
Prashant Mathur, CEO of Saatvik Green Energy, said the Budget sends a strong signal to manufacturers planning multi-gigawatt expansion. “By locking in long-term domestic demand through a record Rs 12.21 lakh crore capital expenditure outlay and a nearly 29 percent increase for the PM Surya Ghar Muft Bijli Yojana, the government has created much-needed visibility for large-scale investments across the solar value chain,” Mathur said.
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He added that duty exemptions for battery energy storage systems and key solar inputs would improve cost competitiveness and accelerate domestic capacity creation.
