Budget likely to give momentum to India's energy transition pledge

Global commitments include adding 50GW of renewable energy capacity every year for the next five years

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The Union Budget for fiscal year 2025 (FY25) is expected to emphasize India's energy transition amid a continuing policy focus on renewable energy.

Industry executives and sector experts suggest relaxations on levies on sectors such as green hydrogen may be part of the upcoming interim budget that Finance Minister Nirmala Sitharaman is set to present on 1 February.

"The Indian economy has performed strongly in recent times, despite geopolitical challenges and slow economic growth in export markets. The interim budget, despite being a vote on account, should be seen as an opportunity to spur even further capital inflows into India and keep up the growth momentum. It will, therefore, be good to see continued thrust on the government's capex," said Sumant Sinha, chairman and chief executive officer of ReNew, the first Indian renewable energy company to list on Nasdaq.

Noting that 2024 is the first year of India's global climate commitment to add 50GW of renewable capacity every year for the next five years, Sinha said the tripling of the pace involved would require progress on tenders, approvals and infrastructure development.

"Though not a usual practice for votes on account (as they deal with expenditure, not revenue), the government may consider a revision in taxes and duties on battery energy storage systems and green hydrogen supply chain components to provide a fillip to growth of these from the first quarter itself of the fiscal year," the ReNew chairman added.