India’s Union Budget for 2024-2025, marks a significant stride towards the nation’s sustainable development and energy transition goals. At the heart of this year’s fiscal roadmap lies a strong emphasis on green energy initiatives, critical minerals, and support for industries transitioning to cleaner technologies.
The budget introduces several key measures aimed at boosting India’s renewable energy sector, with particular focus on solar power. The ambitious PM Surya Ghar Muft Bijli Yojana, targeting rooftop solar installations for 10 million households, stands out as a flagship programme. Additionally, the government has allocated substantial funds for solar projects and announced policies to promote energy storage solutions, recognising the need for grid stability as renewable energy integration increases.
In a move that could significantly impact the electric vehicle (EV) and high-tech industries, the budget proposes full exemption of customs duties on 25 critical minerals. This decision, coupled with the introduction of a Critical Mineral Mission, is expected to strengthen India’s position in the global supply chain for these essential resources.
The budget also outlines plans for advancing nuclear energy, improving efficiency in thermal power plants, and supporting the transition of ‘hard to abate’ industries towards lower emissions. With these comprehensive measures, the government aims to balance economic growth with environmental sustainability, setting the stage for India’s evolution into a greener, more energy-efficient economy.
As industry leaders and experts analyse the implications of these announcements, their reactions provide valuable insights into the potential impact and challenges of implementing these ambitious plans. Renewable Watch provides edited excerpts of budget reactions by industry executives working in the renewable energy sector….
Anil Agarwal, Chairman, Vedanta Ltd.
“The abolition of angel tax will give a big boost to our startups and young entrepreneurs who are the job creators of the future. The commitment to speed up IBC resolution will lead to 12,000 businesses restarting operations and many more jobs. I am also delighted to see the announcement related to Critical Minerals Mission. India must explore, mine and process these metals of the future domestically.”
Preeti Bajaj, MD & CEO, Luminous Power Technologies
“The budget announcement has provided the much-needed boost to the energy sector underscoring the commitment to energy security and sustainability. While the interim budget announced a strategy to sustain high and more resource-efficient economic growth, and security in terms of availability, accessibility, and affordability, the renewable energy players will be awaiting the policy document on appropriate energy transition pathways. The PM Surya Ghar Muft Bijli Yojana is a revolutionary initiative that has garnered an overwhelming response, with over 12.8 million registrations and 1.4 million applications. This sets a strong precedent for sustainable energy adoption in India. The Government’s proposal to expand the list of exempted capital goods used in the manufacturing of solar panels is a significant step towards promoting solar energy and driving the energy transition. Aligning with India’s commitment to achieving net zero, we will continue evolving and innovating our efforts towards the adoption of rooftop solar since solar energy holds the potential for contributing to a better planet and a sustainable future.”
Suhas Baxi, Co-founder and CEO, BioFuelCircle
“The goal to invest Rs 30.5 trillion in renewable energy by 2030 strengthens the pathway towards greener and cleaner energy. The Union Budget 2024’s focus on green energy, digital agriculture infrastructure, and rural enterprises aligns perfectly with BiofuelCircle’s mission. Our digital platform for the bioenergy supply chain uniquely connects rural and industrial economic segments. Supporting small rural enterprises, providing easy access to working capital, and offering competitive financing rates will help drive circular economic practices. Incentivizing the use and production of green fuels and biofertilizers is crucial for India’s energy security and sustainability goals.”
Miniya Chatterji, Founding Director, Anant School for Climate Action, and CEO, Sustain Labs Paris
“The government has laid its focus on energy security as one of the pillars in the Union Budget 2024. The new policy document on India’s energy future is much awaited, and I expect it to include the plans to achieve rooftop solarisation, enhancing electric vehicle infrastructure, and promoting biodegradable polymers & bioplastics – as was announced in the interim budget in February. I also look forward to the government’s focus on developing indigenous energy technologies and building local capabilities amongst micro and small industries in energy production and management. On that note, the provision of financial support to micro and small industries for shifting to cleaner forms of energy is also a commendable move by the government. Another good move is the exemption of custom duty on capital goods for manufacturing of solar cells and panels. A taxonomy for climate finance, as planned by the government, will help improve the availability of funds for adapting to climate change and reduce greenhouse gas emissions. Under urban development, the budget also talks about promoting water supply, sewage treatment and solid waste management projects and services for 100 large cities in India. This will set a benchmark for water and waste management practices which can then expand to tier-2 and tier-3 cities eventually.”
Gyanesh Chaudhary, CMD, Vikram Solar Limited
“The Union Budget 2024 has positioned India as a frontrunner in the global solar energy landscape. By allocating a substantial Rs 73.27 billion for solar projects and introducing initiatives like the PM Surya Ghar Muft Bijli Yojana, which aims to provide free electricity to one crore households, the government has demonstrated a strong commitment to clean energy. This budget is a catalyst for the growth of the Indian solar industry, empowering millions of households with access to affordable and clean electricity. Moreover, by supporting ancillary sectors like pump storage and creating a conducive environment for innovation through tax incentives for solar cell and panel manufacturing, the budget has laid a robust foundation for India’s energy transition.”
Prassann Daphal, CEO, Recyclekaro
“The government’s announcement of a 25 per cent waiver on customs duty for nearly 25 critical minerals is poised to drive demand across various renewable sectors, including energy storage solutions, electric vehicles (EVs), high-tech electronics, defense, and space. This initiative will bolster the refining and processing of these minerals, strengthening a resilient supply chain ecosystem. Additionally, the establishment of a ‘Critical Mineral Mission’ aims to oversee domestic production, recycling, and international acquisition of critical mineral assets. The mission will prioritize technology development, skilled labor, and an expanded producer responsibility framework, including Extended Producer Responsibility (EPR), which will benefit the e-waste and battery recycling sectors. This well-planned budget reflects a strong commitment to supporting the critical minerals sector, which is crucial for advancing greener transformations.”
Gaurav Dolwani, Founder & CEO, LICO Materials
“The exemption of customs duty on critical minerals like Lithium, Cobalt, and Nickel will boost India’s efforts in renewable energy and electric vehicle sectors. It is a big step towards achieving sustainability. As a recycling company, we welcome the proposal. The price benefit will be passed onto the end user fueling the government’s electrification vision for 2030 and net zero vision for 2070.”
Udit Garg, CEO & Director, Kundan Green Energy
“In my view the union budget bodes well for the green energy and renewables sector in India. The initial broad-strokes of policy will foster demand while encouraging the industry to increase capacities. This is complemented by steps to augment energy security. The government’s rooftop solar policy is of latitudinal importance and will not only be a boon for power to every home, it will have exponential impact on the country’s renewable agenda helping us leapfrog to goals. Similarly, pumped storage will be a ground resilience for hydropower.”
Sameer Gupta, Chairman & Managing Director, Jakson Group
“The Union Budget 2024 is a major milestone for the nation, fostering economic growth, infrastructure development, and energy independence. The PM Suryaghar Muft Bijli Yojana, aimed at installing rooftop solar panels in 10 million households to provide 300 units of free electricity, is transformative in making sustainable energy accessible. This will boost solar adoption in the residential sector and drive economic growth. Special attention has been given to MSMEs and manufacturing. The support includes a Credit Guarantee Scheme, term loans for machinery, and technology financing packages. These measures will help MSMEs scale up and enhance competitiveness. The budget also prioritizes infrastructure development with long-term interest-free loans to states and significant project allocations, enhancing connectivity, economic activities, and overall quality of life across the nation. Additionally, the simplified rules for foreign direct investment and overseas investment will open new avenues for global expansion, attract international investments, and enhance our global footprint. These measures will advance the renewables sector, and help combat climate change.”
SK Gupta, CFO, AMPIN Energy Transition
“The current budget continues to reflect the government’s focus on energy transition through a list of additional initiatives like:
- Launching of PM- Surya Ghar Muft Bijli Yojna, since its announcement in interim budget, has received remarkable response, and will help larger penetration of renewable energy for household use.
- A policy for promoting pumped storage projects will boost renewable energy penetration through storage integration.
- A roadmap for moving from energy efficiency to emission reduction targets will further help in promoting RE power. Financial support to MSME for transitioning to a cleaner form of energy will further spread renewable energy in the industrial sectors.
- Developing a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation is a welcome step. We expect the Government to come out with detailed guidelines in the matter.
- Exemption of custom duty on import of specified equipment’s for manufacture of solar cells and modules is a welcome step and will help further promote in house manufacturing of the same in the Country.
- Move for custom duty exemptions on import of lithium and other related chemicals will promote battery storage solutions for better integration for providing RTC.
While appreciating the above policy framework, the industry expects that some of the following critical demands for promoting renewable energy in the county should be met through suitable amendments in the budgetary provisions:
- Classifying renewable industry as a part of ‘Priority Sector lending’ and helping make available project finance at very competitive rates for RE projects.
- Rationalization of indirect tax-GST rates on turbines and modules to be 5 per cent each against existing 12 per cent.
- Exemption of ALMM for Corporate & Industrial projects.
- Need for greater push on developing & promoting in house R&D facilities for development of latest technologies for cell, module manufacturing and their backward integration. To also promote in-house manufacturing of capital goods for the industry to avoid reliance on imports from third countries.
- Renewable being a continuously growing industry, providing clean energy at competitive rates we request the government to reconsider extending concessional tax rates for new projects for a further period of 2 years.”
Ankit Hakhu, Director, CRISIL Ratings
“The plan for supporting solar rooftops in 10 million households augurs well for developers and module manufacturers as it will bump up rooftop demand. It will also be attractive for households given the potential to save electricity cost of Rs 15-18,000 per annum per household. That said, the quantum and mechanism of disbursements and timelines around the support will determine the pace of progress of the scheme and will bear watching.”
Vikram Handa, MD, Epsilon
“Overall the Union Budget presents positive measures for various industries. For the battery sector specifically, the government’s proposal to fully exempt customs duty on critical minerals like Lithium and Nickel would definitely benefit industries in the electric vehicle (EV) battery supply chain in the short term. However, more needs to be done to develop cathode and anode manufacturing factories in India to development the EV ecosystem. Towards developing the EV ecosystem, Indian government has been facilitating bilateral talks with many countries for acquisition of critical minerals mines for the last 2-3 years. It is imperative to focus on the end users for critical minerals which are not battery factories but processing companies manufacturing anode, cathode and electrolyte. These companies need to be incentivized so they can further invest in domestic and foreign critical mineral assets.”
Srivatsan Iyer, Global CEO, Hero Future Energies
“I would like to congratulate the Government for presenting a visionary Budget that focuses on sustainable and inclusive economic growth. I particularly welcome several announcements that reflect the Government’s continued support for the renewable energy sector. The impetus on PM Surya Ghar Muft Bijli Yojana will help fast track nationwide adoption of roof top solar, helping expand our overall RE capacity. The proposed investment in Pumped Storage programmes is a much-needed step that will ensure smoother integration of growing RE, leading to more reliable supply of green power and grid stability. The focus on transitioning hard to abate industries to greener alternatives will catalyze the C&I sector’s journey towards net zero. Introduction of a taxonomy for climate finance will help attract much needed capital for boosting climate resilience. Finally, the expanded duty exemptions will also help propel the RE sector ahead. This is a positive budget for the sector that should help continue the momentum of India’s energy transition and Hero Future Energies remains committed to partnering with the Government in enabling this mission.”
Ammu Susanna Jacob, Research Scientist in the Energy & Power team at CSTEP
“To integrate more renewable energy into the grid, there is a focus in the union budget on long-duration discharge storage that is readily available in the country, specifically pumped hydro. Pumped hydro storage is the most cost-effective long-term storage option because of its longevity and extended discharge duration. “A policy for promoting pumped storage projects will be brought out for electricity storage . . .” is a welcome statement from the Finance Minister as it allows for the seamless integration of renewable energy into the grid and the effective management of the grid. Following the announcement of the pumped hydro policy in April 2023, we have seen a surge in the number of pumped hydro projects being announced and progressing through various stages of development. When the new policy is in place, pumped storage plants will be poised to deliver even greater benefits, enhancing their capacity to support the grid and integrate renewable energy sources more effectively.”
Gopal Kabra, Founder & MD, GK Energy
“The budget can be termed as progressive aimed at bolstering the solar sector’s growth and sustainability and we welcome the budget proposals. The government’s commitment to increasing investment in renewable energy was evident through significant allocations for solar infrastructure development, and energy storage solutions. Notably, the custom duty exemption on capital goods for solar cells and panels stands out as a pivotal move. This exemption is expected to lower production costs, making solar energy more affordable and accessible. More than 13 million registrations and more than 1.4 million applications under PM Suryaghar initiative is poised to accelerate rooftop solar installations, enhancing energy security and supporting the energy transition. Additionally, the establishment of a carbon market will incentivize reduced emissions, aligning with India’s climate goals. These initiatives collectively reflect a forward-looking vision for a sustainable and self-reliant solar ecosystem in India.”
Saurabh Kumar, Vice President- India, Global Energy Alliance for People and Planet (GEAPP)
“The policy-driven emphasis on the energy sector in the Union Budget 2024-25 exemplifies the Government’s commitment to integrating the principles of energy security and energy transition as a cornerstone of Viksit Bharat. We anticipate that the development of energy transition pathways will bolster state-level initiatives aimed at accelerating renewable energy adoption. Furthermore, the proposed financial support for MSMEs to transition to cleaner energy forms will be pivotal in fostering positive change at the grassroots level.”
Uday Narang, Founder and Chairman, Omega Seiki Pvt. Ltd.
“We commend Finance Minister Nirmala Sitharaman and the government for the 2024 Budget, reflecting a visionary approach to the automotive sector. Exempting import duties on critical minerals, including lithium, cobalt and other minerals reduces battery manufacturing costs and makes electric vehicles more affordable. Investing in skill development, with 1,000 industrial training centres, ensures a skilled workforce for our evolving industry. The focus on women-led development and substantial allocation for schemes benefiting women and girls fosters inclusivity and empowerment. These initiatives will propel the industry towards a greener and more inclusive future.”
Amit Paithankar, Chief Executive Officer, Waaree Energies Limited
“The Union Budget 2024-25 is expected to mark as a transformative moment for India’s renewable energy sector, reaffirming the government’s commitment to sustainability, energy security, and economic growth. The PM Surya Ghar Muft Bijli Yojana is an initiative which is not only revolutionizing energy accessibility and affordability but also expected to generate substantial employment opportunities in solar panel manufacturing and maintenance while demonstrating the possible tangible benefits of renewable energy adoption. On the other hand, we eagerly wait to witness the announcement of the policy document on energy transition pathways which is expected to be a significant catalyst in the energy sector. Moreover, the exemption of customs duties on 25 critical minerals and the reduction of duties on two others is a decision that may boost resource efficiency and high-tech manufacturing in the solar sector. The expansion of the list of exempted capital goods for solar manufacturing may further strengthen Country’s ability to enhance domestic production capabilities, reducing reliance on imports and fostering self-reliance. Additionally, guidelines for energy efficiency and emission targets for ‘hard to abate’ industries may reduce India’s carbon footprint. Also, the support announced for pump storage projects is critical for maintaining grid stability and ensuring round-the-clock energy availability. The government’s development of a taxonomy for clients to enhance the availability of capital for climate adaptation and mitigation is another noteworthy initiative. This may facilitate the achievement of the country’s climate commitments and green transition, providing the financial backbone necessary for sustainable progress. Particularly, the government’s collaboration with private firms to develop small modular reactors and advance nuclear energy technologies signifies a step towards a diverse energy mix for Viksit Bharat. Also, the proposed allocation of Rs 148 billion for education, employment, and skilling is a visionary step that is expected to empower the youth and foster a culture of innovation across all sectors. Another notable aspect of the budget is the emphasis on higher participation of women in the workforce. The solar manufacturing sector is expected to experience a revolutionary shift, as the involvement of women in this field has historically been lower compared to their male counterparts. Overall, these initiatives are expected to provide a robust foundation for us to leverage strategic opportunities, enhance our capabilities, and drive India’s emergence as a global leader in sustainable energy solutions.”
Visweswara Reddy, Chairman & Managing Director, Shirdi Sai Electricals Limited Group
“As anticipated, the 2024 union budget highlights the priority given to the solar and renewable energy sectors. Notably, the PM Suryaghar Muft Bijli Yojana, which aims to install ten million rooftop solar panels, stands out as a significant advancement. This initiative could greatly benefit India’s Solar PV module manufacturers. Furthermore, removing solar glass, glass, and copper wire connectors from the custom duty exemption list is a prudent measure. This decision is crucial to supporting the burgeoning domestic industry. Nevertheless, additional efforts are needed to accelerate the full development of manufacturing capabilities, for the entire manufacturing process (that is from polysilicon manufacturing to module assembly), which requires urgent support in areas like labor regulations, technology imports, land, and infrastructure. Swift action on these fronts is essential for India to meet its ambitious domestic production targets amidst numerous ongoing projects. Pumped storage for power is another vital area with the potential for substantial savings and more efficient power generation utilization. We expect the new policy introduced by the Finance Minister in today’s budget to attract further investments and create new opportunities for manufacturers.”
Tarun Sawhney, Vice Chairman and Managing Director, TEIL
“In the Budget 2025, the Government has laid out a comprehensive roadmap for a ‘Viksit Bharat,’ focusing on key areas such as agriculture, manufacturing, and energy security. The Government’s emphasis on renewable energy sources such as solar, thermal, and nuclear, along with the upcoming policy on pumped storage projects for electricity storage, will facilitate the smooth integration of renewable energy into the overall energy mix. This approach will address the variable and intermittent nature of renewable energy, ensuring a stable and reliable energy supply. Further the increased focus on climate finance and tools such as carbon credits would enhance the speed of green transition through improved viability of the Bioenergy sector. We also commend the Government’s new scheme aimed at incentivizing additional employment in the manufacturing sector. This forward-thinking strategy will not only create job opportunities but also encourage the hiring of fresh talent, driving economic growth and fostering innovation.”
Harsh Shah, CEO, IndiGrid
“We welcome this significant change in rationalisation of the long term capital gain taxation for Business trusts in this budget. InvITs/REITs getting taxed at parity with equities will enhance their attractiveness for investors and will strengthen their position as platforms providing superior risk adjusted returns. We believe that this will also enable InvITs and REITs to become part of stock exchange indices, which will add significant liquidity and momentum.”
Manoj Sinha, CEO and Co-founder, Husk Power Systems
“The Union Budget 2024-25 presented by Finance Minister Nirmala Sitharaman has taken a crucial step towards enhancing India’s climate action by proposing the development of a taxonomy for climate finance. I was very glad to hear the terms Climate Adaptation funding as it is a non-trivial way to look at financing renewable energy programs. I am hoping to see more clarity on this action and subsequently policies supporting climate adaptation projects as this will redefine the future of energy security for rural communities that bear the brunt of the climate change. Furthermore, the budget highlights the government’s commitment to bringing out a policy document on appropriate energy transition pathways. This will provide a roadmap for India’s energy transition, outlining strategies and measures to accelerate the adoption of clean energy technologies, promote energy efficiency, and reduce the country’s reliance on fossil fuels. By considering the socio-economic implications of the energy transition, the government aims to ensure a just and inclusive transition that benefits all segments of society. I found a few missing items that were not spelled out in the budget and that included using Artificial intelligence enabled Virtual Power Plant to systematically integrate of decentralised energy resources and with the centralized grid as this is the only viable path to India’s ambition of net zero by 2070. This is the need of the hour and Power Ministry must consider allocating resources and funding to enable this mechanism. Overall, the Union Budget 2024-25’s focus on developing a taxonomy for climate finance and formulating a policy document for energy transition will contribute to India’s climate goals. With the addition of AI powered VPPs to integrate DERs (like microgrids and PM Suryaghar Muft Bijli Yojana) with the centralized grid India will establish itself as a leader in the global fight against climate change.”
Sumant Sinha, Founder, Chairman & CEO, ReNew
“The Union Budget 2024 has undeniably taken forward the Prime Minister’s commitment towards India’s clean energy transition. The Finance Minister’s announcement that the Government will release a policy document on India’s energy transition pathway and policy on pumped storage will provide much needed long term clarity for investments across the value chain. The continuation of the PM Surya Ghar Muft Bijli scheme, on the back of an overwhelming response for its subscription, underscores the growing appetite for clean energy solutions among citizens, aligning perfectly with our national sustainability goals. Additionally, with nuclear energy poised to be a cornerstone of our energy mix, and innovative nuclear technologies being developed in partnership with the private sector, the future looks promising. With continued policy support, accessible financing, and robust public participation, I am confident that we will achieve our renewable energy aspirations for a cleaner, more resilient, and economically vibrant India.”
Dr Anjali Taneja, Senior Policy Specialist in the Climate, Environment and Sustainability team at CSTEP
“The Government of India introduced the Critical Minerals Mission for the very first time in the Union Budget 2024. This step will significantly boost the indigenous production and recycling of these minerals, directly improve resource recovery, and give a significant thrust to circular economy.”
Amit Uplenchwar, Director, Kalpataru Projects International Ltd
“Energy security and infrastructure have been highlighted as top priorities in the budget proposal by the Hon’ble Finance Minister. Alongside the allocation of Rs 11 trillion for capital expenditure, the government has pledged to maintain strong fiscal support for infrastructure investment. The provision of Rs 1.5 trillion for long-term interest-free loans to states for infrastructure development is a positive announcement that will significantly boost state-level projects. It is encouraging to see the government promoting niche areas in the renewable energy ecosystem, such as pumped storage hydro projects and modular nuclear reactors. Moreover, the commitments to enhance private investment in the sector through viability gap funding, enabling policies and regulations, and a market-based financing framework will attract private capital and stimulate business growth within the domestic market.”
Dr. Rahul Walawalkar, President of India Energy Storage Alliance (IESA) and President and Managing Director of Customized Energy Solutions India
“The four-year PF support is a good move to benefit new manufacturing facilities. IESA Academy also welcomes the announcement of “5 schemes and initiatives “to facilitate employment, skilling and other opportunities for 41 million youth over 5 years with a central outlay of Rs 2 trillion”. Over 1000 industrial training institutes with course content aligned to industry and emerging needs were a demand of today’s youth. As India’s Clean Tech and Energy Storage sector is gradually becoming the biggest employment generation sector, the announcement of a scheme for internships in the top 500 companies to 10 million youth will play a vital role in empowering the nation’s youth. Keeping the promise of the development and empowerment of women, Rs 3 trillion for schemes benefitting women has been announced this financial year.” A great move towards making India the global hub for processing of critical minerals that are essential for advanced energy storage, emobility, solar and green hydrogen manufacturing domestically as well as for export. IESA also welcomes announcement for support of Pumped Hydro storage in budget, which is a key step for supporting Long Duration Energy Storage technologies. We welcome efforts for support for hard-to-abate sectors for improving energy efficiency and adopting clean energy. Recent tender results for RE+ storage have demonstrated that India is poised to adopt large scale “Firm and Dispatchable Renewable Energy” (FDRE) coupled with energy storage for such decarbonization effort. Custom duty exemption for critical minerals for supporting Lithium ion battery manufacturing as well as associated supply chain is a great move in the direction towards making India the global hub for critical minerals. Abolishment of Angel tax is a great and long overdue step boosting investor’s confidence and the promising EV and Clean tech startup ecosystem.”
