What the numbers and policy signals suggestIndia’s climate strategy has expanded steadily since 2021, with increasing focus on renewable energy, industrial decarbonisation, and climate-linked infrastructure. Budget 2026 continues this trajectory, but the allocations reflect a cautious, phased approach rather than a large-scale capital push.A key announcement is that ₹20,000 crore has been allocated over five years for Carbon Capture, Utilisation and Storage (CCUS). CCUS enables carbon capture from industrial processes and is critical for sectors such as steel, cement and aluminium, which together account for a large share of India’s industrial emissions. These sectors are also directly exposed to the European Union’s Carbon Border Adjustment Mechanism (CBAM), which, from 2026, will impose carbon-linked taxes on imports based on emission intensity.India is a major exporter of steel and aluminium to Europe. As CBAM expands to cover more industrial products, CCUS could become central to preserving export competitiveness. However, industrial-scale CCUS deployment typically requires multi-billion-dollar investments, long-term offtake guarantees, and regulatory clarity. The current outlay signals pilot programmes, technology testing, and early-stage infrastructure development.Beyond CCUS, Budget 2026 raised rooftop solar funding under the PM Surya Ghar Yojana from ₹17,000 crore to ₹22,000 crore, maintained PM-KUSUM solar irrigation funding at ₹5,000 crore, extended zero customs duty on nuclear imports till 2035, and continued modest funding for green hydrogen initiatives. Together, these indicate broad-based experimentation rather than aggressive capital concentration.The broader context is changing rapidly. According to the EU, CBAM will initially cover steel, aluminium, cement, fertilisers, electricity and hydrogen, with scope to expand further. Separately, Goldman Sachs estimates global data centre electricity demand will rise 50% by 2027, intensifying competition for clean energy and low-carbon manufacturing.Whether current allocations can keep pace with global climate-linked trade shifts remains an open question.
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