India’s cleantech startup ecosystem is set to receive a fillip from the measures announced by finance minister Nirmala Sitharaman in her Union Budget 2026 speech.

For starters, an outlay of INR 20,000 Cr over the next five years paves the way for a new scheme that focusses on the adoption of carbon capture, utilisation and storage (CCUS).

Besides, the Budget also extended basic customs duty (BCD) exemptions on capital goods used for manufacturing lithium-ion cells and critical mineral processing, along with introducing new BCD exemptions for the import of sodium antimonate used in the manufacturing of solar glass.

This is expected to improve the margins of capital-intensive cleantech startups that rely on imports for certain manufacturing operations by reducing their overall tax burden.

“Aligning with the roadmap launched in December 2025, CCUS technologies at scale will achieve higher readiness levels in end-use applications across five industrial sectors, including power, steel, cement, refineries and chemicals,” Sitharaman said during her ninth Budget speech on Sunday.

The government has set a target of capturing 750 Mn tonnes of carbon dioxide (CO2) by 2050 from hard-to-abate sectors.

These sectors — primarily steel, cement, chemicals, aluminium, shipping, and aviation — are industries where reducing greenhouse gas emissions is challenging due to high-energy demands, process-specific CO2 emissions and higher costs.

While CCUS is seen as a critical tool for decarbonising hard-to-abate sectors, high capture and transport costs, policy uncertainty and lack of infrastructure have limited large-scale deployment so far.

The CCUS/CCS roadmap, laid out by the Department of Technology on December 2, 2025, bids to overcome the regulatory barriers that have slowed........

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