Budget 2026: Hardeep Singh Puri Outlines India's Strategic Energy Shift and ₹12.2 Lakh Crore CapEx

Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, has described the Union Budget 2026 as a mature and far-sighted roadmap designed to propel India toward its goal of becoming a developed nation by 2047. Speaking on the strategic priorities of the budget, Puri emphasized that the government is focusing on high-quality economic growth, fiscal discipline, and energy security. The budget arrives at a time of global economic turmoil, positioning India as an oasis of calm with a projected growth rate of 7.4 percent. A central pillar of this strategy is the massive increase in capital expenditure, which has been raised to ₹12.2 lakh crore to stimulate infrastructure and job creation.

A Vision for a $1.3 Trillion Economy

The Minister noted that India's economy has shown remarkable resilience, moving from the tenth position globally to the fourth, with the GDP increasing from $1 trillion to $1.3 trillion. This budget is seen as a critical step in the transition from the fourth to the third-largest economy in the world. Puri highlighted that the consistent focus on capital expenditure since 2014, when it stood at approximately ₹2 lakh crore, has been the primary engine for this growth. The current allocation of ₹12.2 lakh crore represents a significant leap intended to sustain momentum in sectors like maritime, refineries, and energy infrastructure.

Decarbonizing Heavy Industry with CCUS

A standout feature of Budget 2026 is the ₹20,000 crore allocation for Carbon Capture, Utilisation, and Storage (CCUS). This initiative is aimed at decarbonizing hard-to-abate sectors, including refineries, steel, cement, and power. While the Minister acknowledged that the amount is a beginning, he stressed its importance in the global energy transition. Refineries, which are evolving from simple crude processors to petrochemical hubs, will be primary beneficiaries. This move aligns with India's commitment to net-zero targets and provides a fiscal incentive for industries to adopt cleaner technologies.

Relief for CNG Consumers via Biogas Incentives

In a move to promote green fuels, the budget has announced a full excise duty exemption on the biogas component used in blended Compressed Natural Gas (CNG). Previously, a 14 percent levy was applied to this component. By removing this tax, the government expects to reduce production costs by approximately ₹14 to ₹15 per kg. This relief is expected to be passed on to retail consumers, making CNG more competitive against traditional petrol and diesel. Furthermore, this policy encourages the use of agricultural waste for biogas production, which simultaneously supports the rural economy and reduces the national oil import bill.

The Green Hydrogen Price Milestone

During discussions at India Energy Week 2026, Puri shared updates on India's Green Hydrogen Mission. He noted that global prices for green hydrogen were around $1.5 per kg, but through strategic tenders, India has successfully brought the cost down to less than $1 per kg. The government aims to push this price below the $1 mark to trigger mass-scale adoption across the public and private sectors. Currently, Indian Oil Corporation (IOC) refineries and public transport buses in Delhi are already utilizing green hydrogen, signaling a steady transition toward a hydrogen-based economy.

Strengthening Energy Security through Diversification

Addressing energy security, the Minister clarified that India is actively diversifying its crude oil sources to ensure stability and competitive pricing. India has expanded its supplier base from 27 countries to 41. Puri mentioned recent bilateral discussions regarding Venezuelan oil, noting that India's refineries are well-equipped to process heavy crude from the region. He emphasized that India will continue to purchase oil from wherever it is most cost-effective, prioritizing national interest and energy stability over geopolitical pressures.

Unlocking $150 Billion in Investment Opportunities

The government has identified massive investment potential across the energy value chain, totaling over $150 billion. This includes opportunities in exploration and production, natural gas infrastructure, and alternative fuels. The Prime Minister’s 'One Vision, One Grid' roadmap aims to increase the share of natural gas in the energy mix to 15 percent, representing a $12 billion opportunity alone. Additionally, the refining and petrochemical sector offers an $17 billion window for global and domestic investors.

Critical Minerals and the EV Ecosystem

Budget 2026 places a high priority on critical minerals, which are essential for the production of electric vehicle (EV) batteries and renewable energy hardware. The government is focusing on securing supply chains for rare earth metals to reduce dependence on imports. This focus is paired with incentives for battery storage and EV infrastructure, ensuring that India remains competitive in the global shift toward electric mobility. The Minister noted that these minerals are the backbone of future energy technologies.

Digital Infrastructure and Tax Holidays

In a unique move to link energy and data, the budget offers a 20-year tax holiday for cloud data centers established in India. Puri explained that energy depends on data and data depends on energy, making this a strategic alignment for the digital age. This policy is intended to attract global tech giants to host their data locally, fostering a robust digital ecosystem that will support India's economic ambitions through 2047.

Market Impact

The energy sector's focus in Budget 2026 is expected to have a positive impact on several stock market segments. Oil Marketing Companies (OMCs) like BPCL, HPCL, and IOCL are likely to benefit from the CCUS incentives and biogas exemptions. City Gas Distribution (CGD) companies such as IGL and MGL may see increased margins due to lower input costs for blended CNG. Furthermore, infrastructure and capital goods firms are positioned to gain from the ₹12.2 lakh crore CapEx rollout. Investors are closely watching the implementation of the green hydrogen tenders and the progress of the $150 billion investment roadmap.

Conclusion

Union Minister Hardeep Singh Puri’s analysis of Budget 2026 paints a picture of an economy that is balancing rapid growth with a disciplined transition to sustainable energy. By combining massive infrastructure spending with targeted incentives for green hydrogen, biogas, and carbon capture, the government aims to insulate India from global volatility while building a self-reliant energy ecosystem. The focus now shifts to the execution of these policies and the participation of global energy leaders in India's $150 billion growth story.