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’s 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 EU’s 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’s CBAM-exposed exports to the EU.
Intent and outcome: On India’s climate budget for 2026-27
