For trade and exports, the budget has mixed responses. On the one hand measures such as the Export Promotion Mission and Bharat Trade Net digital infrastructure are expected to improve India’s global trade competitiveness, and, on the other hand, import duties on steel and EV-related products suggest a protectionist stance to curb trade deficits. Therefore, while in the past, the government focused on lowering trade barriers to attract foreign investment, this year’s budget has taken a mixed approach – incentivising domestic production while discouraging imports in select sectors.

To achieve the balance between self-reliance with global competitiveness, India could adopt trade policies such as carbon border adjustments to prevent export disadvantages in a world where decarbonisiation is important. This will ensure that trade of products/materials which are essential for our climate ambitions can continue and be promoted.

The government has recognised ‘energy security’ as a core priority and allocated substantial funds for clean energy expansion including the Nuclear Energy Mission which aims to achieve 100 GW by 2047.²  Additionally, the Urban Challenge Fund also aims to transform cities into clean growth hubs.

In the past, India has accelerated renewable investments without concrete policies to facilitate energy storage. Now, the country must adopt policies which accelerate energy storage deployment and promote sector-level associations between renewables and green hydrogen to scale clean energy adoption in future.

Agriculture has always been central to India’s economic strategy. This year’s budget focuses climate adaptation strategies such as improved post-harvest storage and credit facilitation for climate-resilient crops. The Prime Minister Dhan-Dhaanya Krishi Yojana aims to enhance productivity and climate resilience in 100 districts,¹  integrating crop diversification and improved irrigation. In addition to this, the Mission for Aatmanirbharta in Pulses, which will focus on developing of high-yield, climate-resistant seeds, is expected to go a long way in ensuring long-term food security for India. In coming years, the Government could expand its focus to invest in carbon-smart farming practices, regenerative agriculture and methane reduction technologies in livestock farming.

The Government has introduced production-linked incentive (PLI) schemes in several sectors to boost India’s manufacturing capabilities and to incentivise companies to build and compete in global markets. A new manufacturing mission will promote domestic production of solar modules, advanced chemistry batteries, electrolysers and wind turbines to reduce import dependance. The Union Budget 2025 also aims to positions the MSME’s as the second engine of growth by offering enhanced credit guarantees and tax incentives for clean tech manufacturing. In order to drive industrial decarbonisation, the Government of India could also consider introducing mandatory reporting for MSMEs (similar to the Business Responsibility and Sustainability Reporting), tax benefits for low-carbon supply chains, and research and development support for innovations in green chemistry.