By exempting customs duty for import of goods for nuclear power projects and providing similar exemption for goods used in lithium-Ion cells for battery energy storage systems (BESS) , solar glass inputs and Biogas blended CNG is expected to reduce project costs , boost private capex and improve viability of nuclear energy and renewable power projects.
The budget extended customs duty exemptions for all nuclear power project goods until 2035, regardless of plant capacity. Earlier capacity threshold was 440 megawatt and above and valid till September 30. Budget for 2026-27 extended it till September 2035.
The budget proposed to exempt all goods including non-irradiated fuel element which attracted duty of 7.5% earlier and exempted BCD rate on control and protector absorber rods, burnable absorber rods which attracted duty of 7.5%.
What do consultants say?
“This measure (exemption for nuclear power) not only lowers the cost of nuclear capacity expansion but also provides long-term regulatory certainty, enabling more robust project planning and investment,” said Raju Kumar , partner and energy tax leader at EY, a consulting and audit firm. He said extending customs-duty exemptions for nuclear projects till 2035 strengthens long-term baseload stability.
Currently, nuclear energy projects demand capital expenditure of Rs 20 crore per megawatt, which is expected to come down further .
Sambitosh Mohapatra, partner and leader, climate and energy, PwC India said: “It (exemption)will significantly benefit companies considering investments in nuclear energy. By eliminating import costs for essential equipment, both new and existing nuclear projects—regardless of their capacity—can achieve lower capital expenditure and improved financial viability.”
This policy encourages private sector participation, accelerates project timelines, and makes nuclear energy more competitive compared to other sources, Mohapatra said.
“The long-term support for nuclear energy creates a stable framework for capital-intensive energy investments.” said Rahul Munjal, chairman and managing director at Hero Future Energies , part of Hero group
Renewable energy push
Targeted customs duty exemptions for goods used in lithium-ion cells in BESS and key clean-energy manufacturing inputs will help scale domestic capacity and improve project viability, said Munjal at Hero Future Energies.
The country has set a target of 500 GW of non fossil fuel energy capacity by 2030 and by the end of 2025, achieved 50% of its target.
Kumar at EY said exemptions for lithium-ion cells used in BESS, solar-glass inputs and biogas-blended CNG materially improve project viability. “Collectively, these measures are likely to compress project costs, unlock private capital, and accelerate deployment of storage-backed renewables, “ he said.
Manoj Kumar Jhawar, chairman and managing director, PTC India said the budget has set the tone for the next phase of energy transition, which not merely depends on generating green power, but in our ability to store, transmit and trade it efficiently.
By exempting BCD for goods for making Lithium-ion cells for batteries in BESS, the government has paved the way for round-the-clock renewables, effectively transforming intermittent green energy into firm, dispatchable power, he said, adding that this will significantly deepen the power markets and allow traders like PTC to offer more reliable renewable solutions to utilities and C&I consumers.
Satyen J. Mamtora, CEO and MD of Transformers and Rectifiers (India) said that Customs duty exemptions for nucler and renwable energy products will provide long -term policy visibility and may help moderate costs while supporting investments across clean as well as conventional energy infrastructure.
What does the budget say?
#The budget extends customs duty exemptions for all nuclear power project goods until 2035, regardless of plant capacity.
#The budget proposes to exempt BCD on all goods including non irradiated fuel element which attracted duty of 7.5% earlier
# Exempts BCD on control and protector absorber rods, burnable absorber rods which attracted duty of 7.5%.
# Exempts BCD for goods used in making Lithium-ion cells for batteries in BESS