Aniruddh Agrawal, Chief Strategy Officer, Airox Nigen, “The green hydrogen mission requires a strategic push in the upcoming budget. Expanding the PLI scheme for electrolyzer manufacturing and offering subsidies for green hydrogen production will make this clean fuel more cost-competitive. Such measures are essential to accelerate its adoption across sectors, from transportation to heavy industries. Additionally, tax relief and low-interest financing options for hydrogen infrastructure projects will drive private investments and innovation. With the right policy interventions, India can lead the global hydrogen economy and achieve its vision of a sustainable, low-carbon future”.
Shamsher Dewan, Senior Vice President and Group Head, Corporate Ratings, ICRA Limited, “The domestic textile industry has been on a gradual path in the last one year following a challenging phase of sluggish global demand, supply chain issues and competition from neighbouring countries. Gradual liquidation of retail inventory in end markets and a shift in global sourcing to India have supported apparel exports in FY2025 while domestic demand remain subdued. Union Budget 2025-26 is expected to focus on measures supporting MSME sector, job creation, skill development, tax rationalization on inputs etc. Proposals around favourable financing terms for investments towards value added products shall enhance the players’ competiveness”.
Shekhar Singal, Managing Director of Eastman Auto and Power Ltd., “India’s renewable energy sector stands at a pivotal juncture as we approach the 2025 budget announcement. Initiatives like Muft Bijli Yojana are driving significant adoption of solar energy. Over 6 lakhs plus solar installations in just nine months is indeed impressive. This remarkable growth highlights the increasing demand for clean energy solutions. In addition, the government’s focus on enhancing Production Linked Incentive (PLI) schemes for solar component manufacturing is set to boost domestic manufacturing capabilities. This move will not only reduce India’s reliance on imported components, but also drive innovation, reduce costs, and make the sector more competitive globally in the current geopolitical context as well. The momentum in the solar industry shall ensure that the government’s target of 500 GW of non-fossil fuel capacity by 2030 is surpassed.”
Vimal Kumar, Managing Director, Best Agrolife Ltd said, “India is on its way to becoming a global leader in agriculture, with the Ministry of Agriculture projecting a record-breaking Kharif food grain production of 1647.05 LMT for 2024-25—a remarkable increase from the previous year. This achievement owes much to the unwavering support of the Indian agrochemical industry. However, the challenges persist and to sustain this momentum and bolster India’s leadership in the agriculture and agrochemical sector we need robust government policies.
The 18% GST on agrochemicals makes quality crop protection expensive for farmers. Reducing it to 5% would make these products more accessible, boosting productivity and profitability. Additionally, India’s reliance on imports highlights the need for Production-Linked Incentive (PLI) benefits to encourage local manufacturing.
The increasing pest resistance demands innovative solutions but at the same time the rising raw material costs are a major challenge for industry. To support this, the government could reintroduce the 200% income tax deduction on investments in R&D and registration studies. The PLI scheme and research linked incentives would create an ecosystem that drives innovation and develops solutions tailored to India’s agricultural needs.
The government can promote public-private partnerships to develop new crop protection molecules in India. These partnerships can help share the high discovery costs and boost domestic innovation. With institutional support, they can create a strong R&D ecosystem, reduce import dependence, and make India a leader in the global agrochemical market.”
Karthik Shankar, Associate Vice President, Avalon Consulting said, “The Indian chemicals sector anticipates significant support from the upcoming Union Budget, with manufacturers articulating several key expectations that aim to enhance growth and competitiveness within the industry. A primary expectation is the continuation of the Production Linked Incentive (PLI) schemes, which have been instrumental in nurturing the domestic chemicals industry. These schemes have successfully attracted substantial investments, catalysing innovation and expanding production capacity. The PLI initiative has also created jobs – a core objective of the Union Govt.
In addition to PLI schemes, Indian chemicals manufacturers would benefit from remission of duties and taxes on exported products. By alleviating the tax burden on exports, the government can help domestic manufacturers compete more effectively against international players, especially those from countries with lower production costs. This focus on exports is vital considering ongoing challenges posed by global supply chains and fluctuating commodity prices.
Another critical area of focus for the chemicals sector is the need for budgetary measures that facilitate import substitution of key chemicals such as methanol and trifluoroacetic acid. Many key starting materials for India’s large agro, pharma and specialty chemical industry see significant dependence on imports, primarily from China. Import substitution not only strengthens national security by mitigating supply chain vulnerabilities but also empowers local industries to become more resilient against external pricing pressures. The backdrop of these expectations is a broader context where the Indian economy is projected to grow at ~ 6.4% in FY25, underscoring the need for significant government intervention to revitalize manufacturing sectors that have faced challenges in recent years”.
