The Union Budget 2026–27 proposes the establishment of three new dedicated chemical parks. The government will develop these parks through a challenge-based route and adopt a cluster-based, plug-and-play model to accelerate industrial development.
Boost to Domestic Chemical Manufacturing
Union finance minister Nirmala Sitharaman stated that these chemical parks will significantly enhance domestic chemical production and help reduce import dependence. Moreover, she announced that the government will launch a dedicated scheme to support States in setting up these specialized parks, thereby strengthening the overall chemicals ecosystem. As reported by PIB, the initiatives aim to create world-class infrastructure and attract investments across the chemicals value chain.
₹20,000 Crore Outlay for CCUS Technologies
In addition to infrastructure development, the budget introduces a major push for Carbon Capture, Utilization, and Storage (CCUS) technologies. The government proposes an outlay of ₹20,000 crore over the next five years to improve the readiness level of CCUS applications. Importantly, this initiative will cover five key industrial sectors, including chemicals, power, steel, cement, and refineries, thereby promoting cross-sectoral adoption of clean technologies.
CCUS as a Green Growth Initiative
As a green initiative, the CCUS programme aims to reduce carbon emissions by capturing carbon dioxide and either storing it safely or reusing it productively. Consequently, this approach prevents carbon dioxide from entering the atmosphere and supports India’s long-term climate commitments.
Revival of Legacy Industrial Clusters
Furthermore, the budget announces a scheme to revive 200 legacy industrial clusters. The government will focus on improving their cost competitiveness and operational efficiency through targeted infrastructure development and technology upgradation. This measure is expected to provide a significant boost to the chemicals and petrochemicals sector as well.
Strengthening Traditional Industries for Sustainable Growth
The finance minister emphasized that reviving and strengthening traditional industries is essential for accelerating and sustaining economic growth. She also highlighted that these efforts will play a crucial role in preserving jobs and ensuring inclusive industrial development across the country.
