The Union Budget 2026-27 has proposed the establishment of three new dedicated Chemical Parks to strengthen domestic chemical manufacturing and reduce India’s dependence on imports.
Presenting the Budget in the Parliament, Finance Minister Nirmala Sitharaman said the Chemical Parks will be developed through a challenge-based route on a cluster-based, plug-and-play model. The initiative is aimed at enhancing scale, efficiency and competitiveness in the chemicals sector. The government will also launch a scheme to support states in setting up these parks.
In a major push towards sustainable industrial growth, the Budget announced financial support for Carbon Capture, Utilisation and Storage (CCUS) technologies 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 help advance CCUS technologies to higher levels of readiness for end-use applications.
The CCUS programme is intended to reduce carbon emissions by capturing carbon dioxide and either storing it or reusing it, preventing its release into the atmosphere. The initiative aligns with India’s broader climate goals while enabling hard-to-abate industries to transition towards cleaner production methods.
The Budget also announced a scheme to revive 200 legacy industrial clusters through infrastructure and technology upgradation, a move expected to improve cost competitiveness and operational efficiency across sectors, including chemicals and petrochemicals.
Highlighting the importance of traditional industries, the Finance Minister said their revival and strengthening are critical for accelerating and sustaining economic growth while preserving employment.
