India to allot $4.3bn in fiscal 2023-24 budget to boost clean energy sector

MUMBAI (ICIS)–India plans to allocate rupees (Rs) 350bn ($4.3bn) in the fiscal year 2023-24 national budget for energy transition in the pursuit of the country’s net zero carbon emissions objective by 2070.

The plan was laid out by Indian finance minister Nirmala Sitharaman on Wednesday to the parliament, as part of the government’s measures to increase production and consumption of green energy, including ethanol and green hydrogen in the coming fiscal year ending March 2024.

The government’s National Green Hydrogen Mission launched in January with an allocation of Rs197bn is also meant to help bring down carbon emissions while reducing the country’s dependence on fossil fuel imports, Sitharaman said.

The Rs350bn will be utilised as capital support for oil marketing companies like Indian Oil, and other large companies to set up projects that will help contribute towards the goals of energy transition and to achieve their net zero goals.

“Our target is to reach an annual (green hydrogen) production of 5m tonnes/year by 2030,” Sitharaman said.

To provide impetus to its green energy goals, the government plans to grant customs duty exemption on imports of capital goods and machinery required to produce lithium-ion cells for batteries used in electric vehicles. The exemption will also apply to imports of denatured ethyl alcohol.

The customs duty on acid-grade fluorspar was reduced to 2.5% from 5%, while that on crude glycerine used in the manufacture of epichlorohydrine (ECH) was cut to 2.5% from 7.5%, with immediate effect.

India is targeting to reduce its fiscal deficit to 5.9% of GDP in 2023-24 from an expected ratio of 6.4% in the current fiscal year ending March 2023, Sitharaman said.

Focus article by Priya Jestin

($1 = Rs81.92)