Union Budget 2025: Sets the Stage for India’s Energy Future with Key Power Sector Reforms

The Union Budget 2025-26 marks a transformative milestone for India’s power sector, with significant reforms aimed at driving growth and ensuring sustainable, resilient energy. Key initiatives focus on strengthening nuclear energy infrastructure, reducing reliance on conventional power sources, and boosting electric vehicle manufacturing.

Power Sector Reforms for Sustainable Growth

Union Minister Shri Manohar Lal highlighted the Union Budget’s focus on improving the financial and operational stability of electricity distribution companies. The budget also promotes intra-state transmission capacity, aiming to enhance the efficiency and reliability of India’s power sector.

The budget prioritises nuclear energy, with a vision to develop 100 GW of nuclear power by 2047. The allocation of ₹20,000 crores for research on Small Modular Reactors (SMRs) and the goal of operationalizing five indigenously developed SMRs by 2033 will reduce dependence on conventional energy sources.

Support for Electric Vehicle Manufacturing

The budget proposes customs duty exemptions on critical minerals like lithium-ion batteries, lead, and zinc. This move aims to secure material supply for battery manufacturing, promote job creation, and boost India’s electric vehicle sector by adding 35 new capital goods to the exemption list.

Key Highlights of Union Budget for India’s Energy Sector

The Union Budget 2025-26 has allocated ₹20,000 crore for research and development in Small Modular Reactors (SMRs), a significant step towards advancing nuclear energy technology in India.

The country has set a target to develop 100 GW of nuclear power by 2047, with the goal of operationalising at least five indigenously developed SMRs by 2033.

Additionally, the budget supports the electric vehicle (EV) sector by exempting 35 additional capital goods for EV battery manufacturing, fostering the growth of clean transportation solutions and further strengthening India’s transition to sustainable energy.

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