Union Budget Proposes Three Dedicated Chemical Parks, Pushes Green Technologies

New Delhi: The Union Budget 2026–27, tabled in the Lok Sabha on Tuesday, has proposed the establishment of three new dedicated Chemical Parks through a challenge-based route and a cluster-based plug-and-play model, aimed at strengthening domestic chemical manufacturing and reducing import dependence.

Presenting the Budget, Union Finance Minister Nirmala Sitharaman said the proposed Chemical Parks would enhance India’s production capabilities in the chemicals sector and improve global competitiveness. She also announced that a dedicated scheme would be launched to support States in setting up these parks, enabling faster project implementation and attracting private investment.

In a major green initiative, the Budget has laid emphasis on the rollout of Carbon Capture, Utilization and Storage (CCUS) technologies to achieve higher readiness levels in end-use applications. Financial assistance for CCUS will be extended across five key industrial sectors—Chemicals, Power, Steel, Cement and Refineries. An outlay of ₹20,000 crore has been proposed over the next five years to facilitate the adoption of these technologies.

The CCUS programme aims to significantly reduce carbon emissions by capturing carbon dioxide and either storing it safely or reusing it for industrial applications, thereby preventing its release into the atmosphere. The move is expected to support India’s climate commitments while enabling industries to transition towards cleaner and more sustainable operations.

The Budget has also announced a scheme to revive 200 legacy industrial clusters across the country. These clusters will be strengthened through infrastructure development and technology upgradation to improve cost competitiveness and operational efficiency. The initiative is expected to provide a boost to the chemicals and petrochemicals sector, among others.

Highlighting the importance of traditional industries, the Finance Minister said that reviving and strengthening existing industrial clusters is critical for accelerating and sustaining economic growth, while also preserving jobs. The combined measures announced in the Budget signal a balanced approach towards industrial expansion, environmental sustainability and employment generation.