Cleantech manufacturing gets a boost in Budget 2025

Union Budget

Finance minister Nirmala Sitharaman on Feburary 1 announced a "National Manufacturing Mission" to further India's Make in India programme.

Under the plan, the government will promote clean technology (cleantech) manufacturing, the minister said while presenting the Budget 2025.

"Under cleantech manufacturing, equipment needed in energy transition such as solar PV cells; EV batteries, motors and controllers; electrolysers; wind turbines; high voltage transmission equipments and grid-scale batteries will be promoted," Sitharaman said.

She, however, did not mention the details on how manufacturing of these items in the renewable and new energy sector will be promoted.

The government is already offering production-linked incentives for manufacturing solar modules, electrolysers, EV batteries and another 10 gigawatt (GW) of incentive for grid-scale batteries is in the offing.

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India is chasing a green energy target of 500 gigawatt (GW) by 2030 not only to honour its Nationally Determined Contributions (NDC), but also to ensure energy security. According to the government, demand is expected to surge to a high of 384 GW in 2031-2032, which will need a combined augmentation of power generation capacity, ranging from thermal, renewable, nuclear, and hydropower.

According to the latest NDC targets, India has committed to reducing the emission intensity of its GDP by 45 percent by 2030 from 2005 levels, and achieving about 50 percent installed capacity from non-fossil fuel-based energy resources by 2030.