Union Budget 2025 announces provisions to boost clean tech manufacturing
Finance Minister Nirmala Sitharaman announced that steps will be taken to improve domestic value addition in clean tech and build India’s ecosystem for solar photovoltaic cells, electric vehicle batteries, motors and controllers, and wind turbines.
The Union Budget 2025 shed light on India’s climate goals with the Finance Minister Nirmala Sitharaman announcing provisions to encourage manufacturing of clean technology in the country.
The FM said steps will be taken to improve domestic value addition in the clean technology sector and build India’s ecosystem for solar photovoltaic cells, electric vehicle batteries, motors and controllers, wind turbines, among others.
These announcements come amidst India’s goals to achieve 50% of its installed electricity capacity from non-fossil fuels by 2030, alongside a 45% reduction in emissions intensity compared to 2005 levels.
Additionally, Sitharaman proposed to fully exempt basic customs duty on cobalt power and waste, scrap of lithium ion battery, lead, zinc and 12 other critical minerals.
This is an addition to the 25 critical minerals that were exempted from the basic customs duty in the July 2024 Budget.
“The 2025 Union Budget takes a strong step toward scaling India’s EV and clean energy ecosystem. By prioritising clean tech manufacturing and power sector reforms, the government is addressing key challenges in EV adoption—especially grid capacity and energy distribution. Incentives for states to improve transmission infrastructure will make charging more reliable and accessible,” said Akshay Shekhar, CEO and Co-founder, Kazam, a charging station network operator.
India relies heavily on other countries, mainly Vietnam and China, for import of solar photovoltaic cells. The government has tried to limit the imports of solar modules by introducing production linked incentive (PLI) schemes to encourage domestic development and assembly of these modules.
The total installed non-fossil fuel capacity increased to 214 GW in November 2024, an increase of over 14% compared to 187.05 GW in the same period last year.
The country has also seen a rising adoption of electric vehicles, leading to a rise in demand for electric batteries, which require a number of critical metals including lithium and nickel, which India has limited reserves of.
“The strong push for the manufacturing sector, particularly in clean-tech manufacturing, will not only fuel the 'Make in India' initiative but will also position India as a global leader in future ready manufacturing,” said Anjali Bansal, Founding Partner of Avaana Capital.
(The copy was updated with quotes.)
Edited by Swetha Kannan