As Union Budget 2025 approaches, the spotlight turns toward sustainability—an urgent and indispensable aspect of India’s developmental roadmap. With the ambitious targets of achieving 500 GW renewable energy capacity by 2030 and net-zero emissions by 2070, this year’s budget carries the potential to accelerate the country’s green transition. Focused interventions in water saving, electricity conservation, and sustainable manufacturing can set a new benchmark for India’s environmental stewardship.

Prioritising Renewable Energy and Green Technologies

To meet its 2030 goals, India must expand its investments in emerging energy technologies like offshore wind and green hydrogen. Adequate budgetary allocations toward research, infrastructure, and policy frameworks are essential to fast-track the deployment of these technologies. Beyond energy generation, advancing Carbon Capture, Utilisation, and Storage (CCUS) as part of a broader green hydrogen mission can further industrial decarbonisation. Such initiatives, complemented by incentives for adopting renewable energy in retail and manufacturing, would drive substantial progress toward energy security.

Incentivising Green Building Practices

The construction sector is pivotal in environmental impact, making green building incentives indispensable. By providing tax benefits for eco-friendly building materials, encouraging resource-efficient construction practices, and promoting energy-efficient designs, the government can motivate widespread adoption of sustainable infrastructure. Policies supporting circular economies—through tax reductions on recycling machinery, interest subventions, and subsidies for advanced recycling—can further aid in reducing the sector’s environmental footprint.

A Holistic Vision for Circular Economies

Circularity is integral to achieving sustainability at scale. The government could launch a comprehensive vision document for the circular economy, outlining specific goals and strategies for waste management, recycling, and sustainable packaging. Production-linked incentives (PLI) for biodegradable alternatives and funding for R&D in eco-friendly packaging solutions are actionable steps that would ensure progress across industries.

Climate-Smart Technologies for Agriculture

India’s agricultural sector must also align with its net-zero goals. Establishing a Centre of Excellence for climate-smart agricultural technologies could serve as a springboard for innovation. Commercialising at least five climate smart technologies, targeting wide adoption among farmers, could address climate adaptation and boost resilience in one of the country’s most vulnerable sectors.

Strengthening ESG Commitments

The 2025 budget should prioritise incentives for environmentally sustainable goods, renewable energy integration, and waste management programs to foster the adoption of ESG (Environmental, Social, and Governance) principles across industries. Financial backing for clean transportation, including EV charging infrastructure, can complement these efforts. Expanding the Priority Sector Lending framework to include climate adaptation activities would further ensure that financial resources are directed toward sustainability-driven projects.

Tax Reforms for Sustainability

Proposed tax benefits, such as reduced GST on eco-friendly materials and machinery for recycling, can stimulate sustainable manufacturing. Additionally, subsidies and production-linked incentives for green practices could attract more players to adopt environmentally responsible operations. These reforms would not only contribute to achieving sustainability goals but also boost economic growth in emerging green sectors.

Paving the Way Forward

The Union Budget 2025 presents a crucial opportunity to integrate sustainability into India’s developmental framework. By prioritising investments in renewable energy, incentivising circular economies, and encouraging sustainable practices in key industries, the government can pave the way for a greener future. Such measures will not only strengthen India’s energy security but also reaffirm its commitment to combating climate change on the global stage.