In a significant move to bolster India’s energy security and transition to sustainable power sources, the Union Budget 2025-2026, presented by Finance Minister Nirmala Sitharaman, has unveiled a comprehensive plan focusing on nuclear energy and renewable initiatives. These measures aim to diversify the nation’s energy portfolio, reduce carbon emissions, and promote self-reliance in energy production.
A pivotal highlight of the budget is the establishment of a Nuclear Energy Mission dedicated to the research and development of Small Modular Reactors (SMRs). With an allocated budget of ₹20,000 crore, this mission underscores the government’s commitment to innovative nuclear technologies. The plan includes operationalising at least five indigenously developed SMRs by 2033, marking a significant stride in adopting advanced nuclear solutions.
Finance Minister Sitharaman emphasised the necessity of developing at least 100 GW of nuclear energy capacity by 2047 to meet India’s energy transition goals. To facilitate active private sector participation in this endeavour, the government plans to amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act. These legislative changes aim to create a conducive environment for private investments in the nuclear sector, fostering innovation and efficiency.
The budget also proposes incentives for states undertaking electricity distribution reforms and enhancing intra-state transmission capacity. These measures are designed to improve the financial health and operational efficiency of electricity companies. States implementing these reforms will be permitted additional borrowing of up to 0.5% of their Gross State Domestic Product (GSDP), providing them with the necessary fiscal space to invest in critical infrastructure.
Complementing the nuclear initiatives, India has made remarkable progress in renewable energy development. As of January 2025, the country’s non-fossil fuel energy capacity has reached 217.62 GW, reflecting a robust commitment to sustainable energy sources.
The Centralised Data Collection and Coordination (CCDC) Wind Initiative, launched in June 2020, has significantly advanced wind energy development. By improving wind resource assessment through accurate data collection and research, the initiative has led to an installed wind energy capacity of 48.16 GW. This growth supports the efficient implementation of large-scale wind projects and encourages investments in the sector.
In the solar energy domain, the National Solar Mission has propelled substantial growth. Installed solar capacity has surged from 9.01 GW in 2016 to 97.86 GW in 2025. Additionally, programs like PM-KUSUM and the PM Surya Ghar Muft Bijli Yojana are accelerating solar adoption among farmers and households, further embedding renewable energy into the socio-economic fabric of the nation.
Launched in January 2023, the National Green Hydrogen Mission positions India as a global leader in hydrogen energy. With investments exceeding ₹8 lakh crore, the mission focuses on developing indigenous technology for green hydrogen production and establishing infrastructure for its storage, transportation, and utilisation. By promoting hydrogen as a clean energy source, the mission aims to produce 5 million metric tons of green hydrogen annually by 2030, creating approximately 6 lakh jobs and significantly reducing dependence on fossil fuels.
The Union Budget 2025-2026 delineates a strategic roadmap for India’s energy future, emphasising a balanced mix of nuclear advancements and renewable energy initiatives. Through substantial investments, policy reforms, and fostering private sector collaboration, the government aims to achieve energy security, economic growth, and environmental sustainability. These initiatives not only address the immediate energy demands but also lay the foundation for a resilient and self-reliant energy ecosystem in the years to come.
