India's 2026-27 Fiscal Year Budget Focuses on Manufacturing and Energy Resilience, Boosting Photovoltaics and Strategizing Critical Minerals

India has released its federal budget for the fiscal year 2026-27, with a focus on enhancing the competitiveness of domestic manufacturing and strengthening the resilience of the national energy system. A series of funding support and tariff adjustment measures have been introduced in areas such as the photovoltaic (PV) industry, clean energy manufacturing, and critical mineral supply. The budget allocates a total of 305.39 billion rupees (approximately $3.6 billion) in special funds for solar projects, a 32% year-on-year increase. The funds are primarily directed toward two major PV initiatives: 220 billion rupees for the PM Surya Ghar rooftop solar program and 50 billion rupees for the PM-KUSUM agricultural solar program, further boosting the deployment of residential and agricultural solar installations.

On the manufacturing front, a differentiated tariff adjustment strategy has been implemented to promote the development of domestic industries: the import duty exemption for lithium-ion battery production equipment and critical mineral processing equipment has been extended, while the 7.5% import duty on sodium antimonate, a raw material for solar glass, has been eliminated, reducing costs for raw materials and equipment in related industries. At the same time, it has been clarified that the tariff exemption for silicon wafers and silicon materials used in solar cells will expire on April 1, 2026.

In terms of green technology and critical resource deployment, the budget proposes an investment of 20 billion rupees over five years to support the research, development, and application of carbon capture, utilization, and storage (CCUS) technologies, facilitating the low-carbon transition of energy-intensive industries. Additionally, plans have been outlined to establish a "rare earth corridor" in four mineral-rich states—Odisha, Kerala, Andhra Pradesh, and Tamil Nadu—to improve the mining, processing, and supply chain systems for rare earth minerals. This initiative aims to secure the supply of critical raw materials for sectors such as new energy and advanced manufacturing, reducing dependence on imports.