Union Budget FY2026–27 puts nuclear energy, carbon storage and critical minerals at the centre of India’s decarbonisation strategy
The much-awaited Union Budget FY2026-27, presented by the Finance Minister Nirmala Sitharaman on Sunday, February 1, signals a decisive shift towards aligning India’s economic growth with its decarbonisation ambitions and the long-term vision of Viksit Bharat 2047. This Budget comes at a juncture when India prepares to leverage opportunities arising from the EU–India trade deal while simultaneously navigating the cost risk posed by the European Union’s Carbon Border Adjustment Mechanism (CBAM). Also, for carbon-intensive industries like aluminium, which emits 20.88 tonnes of CO2 per tonne of production in India, making the industry as one of the most carbon-intensive sectors in the country compared to the global average, this budget underpins the urgency of accelerating the transition to decarbonisation.
Metal industries like aluminium at the crossroads of climate policy
India’s metal industry, particularly aluminium, remains heavily reliant on coal-based electricity, which accounts for nearly 80 per cent of its energy mix. This structural dependence places exporters at risk under CBAM, potentially eroding competitiveness in the European market despite improved trade access.
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