Union Budget 2026–27: Three New Chemical Parks, ₹20,000 Cr for CCUS, and Legacy Industrial Cluster Revival
The Union Budget 2026–27 proposes establishing three new challenge-based chemical parks to boost domestic production and reduce import dependence. It allocates ₹20,000 crore for Carbon Capture, Utilization, and Storage (CCUS) technologies over five years, targeting chemicals, power, steel, cement, and refineries for green growth. Additionally, a scheme will revive 200 legacy industrial clusters, enhancing their competitiveness and efficiency, significantly benefiting the chemical and petrochemicals sectors, and supporting sustainable economic growth and job creation across India.
The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman, introduces several key initiatives aimed at bolstering industrial growth, promoting sustainability, and strengthening traditional sectors. A central proposal is the establishment of three new dedicated chemical parks, to be developed through a challenge-based route and adopting a cluster-based, plug-and-play model. These parks are intended to significantly enhance domestic chemical manufacturing capabilities, thereby reducing the nation's reliance on imports. To facilitate this, the government plans to launch a dedicated scheme to support states in setting up these specialized facilities, creating world-class infrastructure and attracting investments across the entire chemicals value chain. Beyond infrastructure, the budget allocates a substantial ₹20,000 crore over the next five years for Carbon Capture, Utilization, and Storage (CCUS) technologies. This funding aims to improve the readiness and adoption of CCUS applications across five critical industrial sectors: chemicals, power, steel, cement, and refineries. Positioned as a green growth initiative, the CCUS program seeks to reduce carbon emissions by capturing and either safely storing or productively reusing carbon dioxide, aligning with India’s long-term climate commitments. Furthermore, the budget includes a scheme to revive 200 legacy industrial clusters, focusing on improving their cost competitiveness and operational efficiency through targeted infrastructure development and technology upgradation. This measure is expected to provide a considerable boost to the chemicals and petrochemicals sector, ensuring sustainable economic growth, preserving jobs, and fostering inclusive industrial development nationwide.
