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Union Budgets began reflecting greater climate concerns from 2021, but there has been a
cautious, disjointed approach to the scale and allocations. Union Budgets began reflecting greater
climate concerns from 2021, in the thick of the COVID 19 pandemic, with a modest 4,500 crore to
localise solar photovoltaic production and to reduce India dependence on Chinese imports. But
there has been a cautious, disjointed approach to the scale and allocations. While five broad
sectors (cement, steel, aluminium and fertilizers; decentralised solar power; greening irrigation
pump sets; green hydrogen; and nuclear energy) received attention in Budget 2026 27, the most
prominent announcement was the proposed five year outlay of ₹20,000 crore for Carbon Capture,
Utilisation and Storage (CCUS). This is a modest provision for a suite of costly and complex
technologies. The allocation signals that India is entering a pilot and demonstration phase, rather
than embarking on immediate industrial deployment. While operational examples exist in Norway,
Canada and the U.S., scaling CCUS has proven expensive and uneven. The technology is primarily
relevant to sectors where emissions are embedded in the production process. The EUs Carbon
Border Adjustment Mechanism (CBAM) will impose carbon costs on imports of high emission
products, so for India, decarbonising industrial production is no longer only a climate imperative. It
is now a question of export competitiveness, particularly for steel and aluminium, which form the
bulk of India CBAM exposed exports to the EU. The Budget also substantially scales up the PM
Surya Ghar Muft Bijli Yojana rooftop solar scheme 22,000 crore in 2026 27 from 17,000 crore (RE)
for the current year. It is a welcome push towards decentralised energy systems that reduce land
pressure, transmission losses and household energy costs. However, implementation challenges
remain, including discom cooperation and upfront finance. Similarly, allocations for PM KUSUM
(solar irrigation pumps), have been sustained at 5,000 crore. Revised estimates suggest stronger
than anticipated absorption. For nuclear energy, the government has extended zero basic customs
duty on imports of nuclear plant equipment until 2035. While this reduces input costs, nuclear
power remains capital intensive, with long construction timelines and financing risks. Recent legal
changes permit private participation, but whether private capital will enter a sector entwined with
national.