India's Union Budget 2025: Accelerating Green Transition and Decarbonisation
Key Ideas
  • Energy efficiency measures will be a key focus in the Union Budget 2025, especially in sectors like industry, MSMEs, agriculture, and buildings to reduce greenhouse gas emissions and enhance sustainability.
  • Climate finance strategies are expected to support scalable investments in clean energy, with an emphasis on creating a multi-source funding ecosystem and establishing a green taxonomy for guiding investments.
  • Decarbonisation efforts in India, including support for green hydrogen and offshore wind projects, will be accelerated through fiscal incentives such as tax holidays and corporate tax benefits, aiming to boost the country's renewable energy capacity.
  • Strengthening the local manufacturing ecosystem for clean energy technologies and extending support through schemes like the Production Linked Incentive (PLI) can drive innovation, reduce costs, and create job opportunities in the green sector.
As India gears up for the Union Budget 2025, there is a palpable anticipation surrounding the government's approach to combat climate change and drive decarbonisation efforts. With ambitious targets to reduce emissions intensity and achieve net-zero emissions, India is at the forefront of global sustainability initiatives. The upcoming budget is expected to prioritize energy efficiency across sectors like industry, MSMEs, agriculture, and buildings, aiming to manage energy demand growth while minimizing environmental impact. The budget is also set to focus on climate finance, creating a funding ecosystem that combines public, private, and international sources to finance green projects. Establishing a clear green taxonomy and providing incentives for energy-efficient technologies can attract investments and align government policies with financial institutions. International cooperation and access to climate finance mechanisms are crucial for India's decarbonisation efforts. India's energy transition will be accelerated through the budget's support for emerging sectors like offshore wind, green hydrogen, and solar power. Fiscal measures including tax incentives and benefits like tax holidays will enhance India's competitiveness in the global market. Strengthening the local manufacturing ecosystem for clean energy technologies through schemes like the Production Linked Incentive (PLI) can further drive innovation and create job opportunities in the green sector. The Union Budget 2025 presents a significant opportunity for India to propel its green transition and decarbonisation agenda.
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