India Union Budget 2026 Expectations: Clean Energy Sector Seeks Support
As India gears up for the Union Budget 2026-27, the clean energy sector is calling for clearer tax policies, better regulations, and financial backing to boost its growth and global standing.
Vineet Mittal, Chairman of Avaada Group, emphasized the importance of this budget for the clean energy transition. He believes it is a crucial chance to address cost challenges and create a stable environment for investments. “We strongly recommend removing income tax on dividends from renewable energy projects to their parent companies. This would facilitate better capital use and help lower energy prices,” Mittal stated.
He also mentioned the need for clarity regarding income generated during the construction of projects. “If this income is classified as capital receipt, it can be deducted from project costs, reducing legal disputes and making it easier to operate,” he explained.
On the indirect tax front, Mittal pointed out that energy storage should be seen as an essential asset in the power sector. Currently, while electricity is exempt from GST, Battery Energy Storage Systems (BESS) and pumped storage services face an 18% GST without input tax credit benefits. “Eliminating GST on storage costs would directly reduce renewable power prices,” he added.
Furthermore, the industry is advocating for a waiver of Basic Customs Duty (BCD) and Integrated Goods and Services Tax (IGST) for a minimum of five years on essential machinery needed for manufacturing solar products such as glass, ingots, wafers, cells, modules, batteries, and advanced technologies. These imported tools currently push project costs up by 20–30%.
As the budget approaches, the call for support from the clean energy sector remains strong, hoping for decisions that could significantly enhance both domestic growth and global influence.
