As India gears up for the Union Budget 2026–27, the clean energy sector is eager for clarity on taxes and policies. Industry experts believe this budget could be a turning point for India’s clean energy ambitions.
Vineet Mittal, Chairman of Avaada Group, emphasizes the need for changes that could boost investment. He suggests eliminating income tax on dividends from renewable energy projects. This move could promote better use of capital and lower electric rates.
Mittal also highlights the importance of treating income earned during project construction as a capital receipt. This change could reduce legal disputes and improve the business environment, making it easier to launch clean energy projects.
In terms of indirect taxes, Mittal believes energy storage should be recognized as a vital power asset. Currently, storage technologies face an 18% GST, which lacks input tax credit benefits. Lowering the GST on storage charges could make renewable energy cheaper.
The industry is also calling for zero Basic Customs Duty (BCD) and Integrated Goods and Services Tax (IGST) for five years on essential equipment for manufacturing solar components. Imported equipment currently raises project costs by 20–30%, hindering growth.
Supporting clean energy aligns with broader trends. According to a recent report from the International Energy Agency (IEA), investment in renewable energy technologies is crucial to meet global climate goals. In 2022, the IEA noted that renewable energy investments reached a record high, showing the sector’s growing importance.
Understanding the roadmap for this budget can make a significant difference. As India pushes forward, decisions made now could shape the future of clean energy and position India as a leader in global renewable energy markets.
For more insights on the impact of the Union Budget on the renewable sector, check out this article from Economic Times.
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