Rare earth corridors directly address input security for renewables, storage and electric mobility
| Photo Credit:
Steve Marcus
Presenting the Budget for FY27, Finance Minister Nirmala Sitharaman proposed basic customs duty (BCD) exemption on capital goods used for manufacturing Lithium-Ion Cells for battery energy storage systems (BESS).
Other important proposals include BCD exemption on import of sodium antimonate used in making solar glass and extending the existing exemption on imports of goods required for Nuclear Power Projects till 2035.
BCD exemption
On critical minerals, the Finance Minister proposed BCD exemption on import of capital goods required for processing and excluding the entire value of biogas while calculating Central Excise duty on biogas-blended CNG.
The Centre aims to support Odisha, Kerala, Andhra Pradesh and Tamil Nadu for creating dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing.
“Today, we face an external environment in which trade and multilateralism are imperilled and access to resources and supply chains are disrupted. New technologies are transforming production systems while sharply increasing demands on water, energy and critical minerals,” Sitharaman emphasised.
Raju Kumar, Partner and Energy Tax Leader at EY India, said that energy transition as a question of Industrial resilience and system reliability, not just capacity expansion seems to be the key mantra of Budget.
Rare earth corridors directly address input security for renewables, storage and electric mobility, while extending customs-duty exemptions for nuclear projects till 2035 strengthens long-term baseload stability, he added.
“On the tax front, exemptions for battery energy storage systems, lithium-ion cells, 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, while the restructuring of PFC and REC could improve credit flow and execution discipline across the power sector,” he added.
Dheeraj Kumar, Project Director of Technology Innovation in Exploration & Mining Foundation (TEXMiN), said developing 20 new National Waterways connecting mineral-rich areas to ports and industrial centres will improve logistics efficiency for the mining sector.
Deepak Acharya, CEO of INOX India, pointed out that the sustained focus on energy through increased support for infrastructure, technology, and critical industrial sectors reinforces commitment to expanding reliable, low-carbon capacity while accelerating the shift toward cleaner fuels and future-ready technologies.
Stable policy
These measures create a stable policy environment for investments in areas such as cryogenics, clean fuels, renewable energy components and high-value industrial equipment, he added.
“The enhanced fiscal space created through substantial resource transfers to states Rs 25.43 lakh crore in FY27 will further enable state governments to advance clean-energy projects, industrial corridors, and large-scale infrastructure that support India’s growing energy and manufacturing needs,” Acharya noted.
Prashant Mathur, CEO of Saatvik Green Energy, said the BCD exemption on sodium antimonate for solar glass will improve cost competitiveness and accelerate domestic capacity creation in a strategically vital segment.
At the same time, rationalisation of customs exemptions and correction of duty inversions signal a shift from protection to performance supporting domestic manufacturing while enhancing export competitiveness, he stressed.
Vinay Thadani, Director & CEO of GREW Solar, said that with ₹40,000 crore invested in initiatives like India Semiconductor Mission 2.0 and development of domestic solar components, the government is strengthening self-reliant, technology-led industrial ecosystems.
Dushyant Chachra, CFO of SAEL Industries, said the Budget strengthens India’s manufacturing with incentives, tax certainty and trade facilitation for better business and investment. While it backs strategic sectors, cluster manufacturing via chemical parks and rare-earth corridors, and SEZ models to boost competitiveness and capacity.
TEXMiN’s Kumar said the announcement of five university townships near industrial and logistics corridors and expanded telescope infrastructure strengthens India’s scientific research and skill-development ecosystem.
Duttatreya Das, Energy Analyst for Asia at Ember, said the support for critical minerals, and manufacturing reforms are expected to quietly strengthen clean energy supply chains.
Published on February 1, 2026
