India's Union Budget 2026-27 to Focus on Reducing Solar Industry Dependence on China
India's Union Budget for FY27 is expected to focus on reducing the country's dependence on China for solar energy projects by implementing corporate tax reductions, GST exemptions, and improved financing options. Industry leaders are advocating for measures such as zero income tax on dividends from renewable energy special purpose vehicles, recognition of energy storage as a core asset, and enhanced incentives for domestic solar manufacturing to achieve the goal of 500GW of non-fossil energy by 2030.
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To decrease reliance on China for solar projects, industry stakeholders anticipate that India's Union Budget FY27 will enhance ease of doing business through corporate tax reductions, GST exemptions, and improved financing options. India aims for 500GW of non-fossil energy by 2030, with solar as a major contributor.
Industry leaders advocate for zero income tax on dividends from renewable energy SPVs, recognition of energy storage as a core asset, and a reduction of GST on storage charges to NIL. They also seek zero Basic Customs Duty and Integrated Goods and Services Tax on capital equipment for solar manufacturing technologies.
An enhanced Production-Linked Incentive (PLI) scheme for polysilicon and wafer manufacturing is recommended to build domestic capabilities and reduce import dependence, especially from China, which dominates global solar manufacturing. There are calls for lower corporate tax rates and accelerated depreciation benefits for solar manufacturing equipment.
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