Union Budget 2025 reporting and Outcomes

Published on March 7, 2025 by Manish Chandna and Prabaldeep Paul

“India is setting an ambitious target of achieving 500 gigawatts of renewable energy by 2030. To support this initiative, an increased focus on nuclear power is essential. Currently, our nuclear energy production stands at only 7 to 8 gigawatts. However, we have established a goal to reach approximately 100 gigawatts of nuclear power by 2047. This shift would significantly transform the nuclear energy landscape in India, which has historically seen minimal private investment.” - Dr Vijay Kumar Saraswat, Member, NITI Aayog, Government of India

“In my opinion, the Union Budget 2025-26 sets a transformative path for India's energy sector, emphasising clean energy, innovation and selfreliance. The Nuclear Energy Mission, aiming for 100GW of nuclear power by 2047 through indigenous small modular reactors (SMRs), marks a historical shift towards long-term energy security and decarbonisation. The amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to facilitate private-sector participation, along with a dedicated R&D initiative for SMRs receiving a INR200bn (USD2,307m) outlay, are commendable steps.” - Subhash Kumar, DG-ACE; Advisor, ISMA; Chairman (Advisory Board), REnergy Dynamics; Member, ETAC (MoPNG); Member, CII Net Zero Council (2022-23); Ex-CMD (ONGC); Ex-Director Finance (PLL); Ex-Director (ACME Solar Holdings)

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Oil and gas

The Union Budget 2025-26 emphasises future readiness with strategic investments in infrastructure. Key allocations for pipeline infrastructure, CBG blending, cavern construction, ethanol blending and crude oil reserves highlight a focus on diversifying energy sources and enhancing energy security.

Expert Opinion:

“Budget 2025-26 significantly boosts funding for the ISPRL project to over INR58bn (USD669m), enhancing energy security with new storage facilities in Karnataka and Odisha. MoPNG received an 11% increase in allocation, focusing on expanding refining capacity to meet rising energy needs and promoting biofuels. Announced investments in rural areas and infra would drive India's development and underscores Modi government's commitment to achieving Viksit Bharat by 2047. The move towards mainstreaming nuclear power and making it a core element of energy transition framework is truly visionary with potential to yield long term dividends for the country.” - Prabha Das, MD and CEO, HMEL; Ex IAS, JS MoPNG

Outcomes:

Ensuring energy security, with plans to increase crude oil storage capacity by constructing additional caverns and boosting imports to support peak demand, mitigating supply risks arising from geopolitical tensions or global supplychain disruptions.

A programme to promote biofuel adoption and blending ethanol and CBG aims to enhance selfsufficiency and contribute to the country’s circular economy.

Chemicals and fertilisers

The announcement of a new urea plant underscores the government’s aim to improve fertiliser availability and reduce reliance on imports, charting a strategic course towards fostering a self-sufficient India

Expert Opinion:

“The slight reduction in subsidy in the budget indicated government’s push towards reducing subsidy dependency and an impetus towards promoting the utilization of bio and organic fertilizers, alongside fostering the increased adoption of nano urea. Moreover, focus on MSMEs and infrastructure development will also indirectly support the chemical sector by stimulating domestic demand and strengthening supply chain resilience. Overall, these measures are likely to attract investments and foster growth in the sector.” - Gaurav Sharma Assistant Director, Acuity Knowledge Partners

Likely Outcomes

Investment in the new urea plant in Assam aligns with the government's long-term goal of reducing dependence on fertiliser imports. The move also strengthens the agriculture sector, together with initiatives to improve crop diversification, irrigation infrastructure and farmer income.

Renewable energy

The budget allocation underscores a strong financial commitment to advancing India's clean energy vision, with a focus on solar power, green hydrogen and energy infrastructure.

Expert Opinion:

“The Union Budget 2025 represents a significant leap forward for India's energy sector. With over INR240bn (USD2.77bn) allocated to solar initiatives and INR17bn (USD196m) to other renewable energy sources, the budget demonstrates a strategic commitment to enhancing energy security and reducing reliance on fossil fuels. The focus on domestic production of solar cells, modules, and grid-scale batteries aligns with the goal of self‑reliance and minimizing import dependency. Additionally, the removal of customs duties on lithium‑ion battery scrap and critical minerals is a transformative policy shift. These measures, along with support for MSMEs and startups, are expected to create green jobs, drive innovation, and promote sustainable growth in the renewable energy sector.” - Rohit Tyagi, Assistant Director, Acuity Knowledge Partners

Cleantech

The budget has set a strong foundation for India’s clean energy transition and manufacturing self-sufficiency, with key allocations for RE, EV, SMR, energy storage and power-sector reforms.

Expert Opinion:

“India aims to achieve 500 gigawatts of renewable energy by 2030, with a critical focus on increasing nuclear power from 7-8 gigawatts to 100 gigawatts by 2047. The recent budget encourages private-sector investment in small modular reactors (SMRs), allocating INR200bn (USD 2.3bn) for their development while ensuring safety through the Atomic Energy Regulatory Board (AERB). This initiative will aid in decarbonising challenging sectors and create jobs in various fields. Additionally, a 48% increase in the Ministry of Electronics and Information Technology budget reflects a commitment to electronics and semiconductor manufacturing, supporting India's overall growth and innovation goals.” - Dr Vijay Kumar Saraswat, Member, NITI Aayog, Government of India

Likely Outcomes

The new cleantech manufacturing mission will be a defining step towards building India’s self‑sufficiency in solar, hydrogen and storage technologies.

The target of 100GW nuclear energy by 2047 under the Nuclear Energy Mission will further accelerate the country’s transition to net zero

Industrials (steel & cement)

As private investment in the industrial sector remains robust, dependence on public-sector enterprises continues to reduce, reflected in lower budgetary outlay.

Expert Opinion:

“The focus of this year’s Union Budget on accelerating the manufacturing sector, especially MSMEs, would boost the metals sector in general and steel and aluminium specifically, which are the most widely used metals in MSMEs, both as inputs and as machinery.” - Bansidhar Bandi, Vice President Steel Exchange India Ltd

“The budget will boost economic consumption, impacting sectors such as automotive, consumer durables and white goods positively, driving up demand for steel” - Nishant Baranwal, Finance and Strategy Advisor, Jindal Group

Likely Outcomes

The government’s strategy of infrastructure-led growth would help the industrial sector through creating domestic demand for core input such as steel, cement and aluminium. Its sustained push for expanding and transforming the mobility sector would also drive the metals sector, especially steel, to invest more in product innovation and become greener.

Automotive

Budget allocation to this sector signifies considerable financial commitment to enhancing India's automotive infrastructure and capabilities.

Expert Opinion:

“The budget promotes green mobility. Tax incentives and domestic manufacturing support will provide a fillip to the automobile sector’s aatmanirbharta ambition. The National Manufacturing Mission will accelerate the energy transition by supporting the deployment of clean technology in the manufacture of batteries and motors. Customs duty exemption on critical minerals, 35 additional capital goods and scraps of li-ion batteries would lead to creating a strong EV ecosystem. The government’s renewed focus on regulatory reform would result in an ease of doing business. The budget’s focus on MSMEs, innovation, exports and supply chain would support the auto components subsector. Overall, the automobile sector is set for a significant leap forward as the government paves the way for increasing investment and a clear policy framework.” - Shashvat Singh, Former consultant on Electric Mobility at NITI Aayog, GoI

Likely Outcomes

The budget is expected to bolster India’s manufacturing sector and promote clean mobility. It aims to establish a comprehensive EV ecosystem, including the development of high-capacity batteries, motors and controllers, support for battery recycling and development of charging infrastructure.

Defence

Clear demonstration of the government’s strategic commitment to enhancing military preparedness

Likely Outcomes

The budget reinforces India’s commitment to modernising its defence forces and fortifying the country’s security infrastructure, with a strong emphasis on self-reliance and technological advancements, together with maintaining operational readiness and sustaining ongoing activities.

Railways

The budget continues to drive the transformation of the sector by focusing on producing better trains, network expansion and employing safety measures and sustainability targets

Likely Outcomes

Despite capital expenditure remaining unchanged from last year, the budget focuses on modernising transport infrastructure through higher allocations to safety, focusing on the travel experience by manufacturing new trains such as Vande Bharat, Amrit Bharat and Namo Bharat rapid rail and emphasis on sustainability, with 100% electrification and small modular reactors as a source of non-fossil energy.

Download the full union budget report with more sector updates and budget reporting.

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