Union Budget 2026 has several proposals to boost coastal shipping and kickstart inland shipping that has largely been a non-starter especially in cargo carrying. It also promises ₹10,000 crore to support the making of containers in India.

After COVID period during which the government realised the value of having Indian tonnage that it can leverage for national needs, the government has announced several proposals to rejuvenate indigenous shipping. In September 2025, the Union Cabinet approved a ₹69,725 crore comprehensive package that included major investment plans so State-owned Shipping Corporation of India (SCI) could buy a range of ocean-going merchant ships. The budget has allocated more than ₹1,700 crore for 2026-27 as part of this package.

In today’s speech, the Finance Minister spoke about the government’s aim to develop inland and coastal shipping so that its share in total cargo carried through road, rail and water increases from 6% to 12%. This would not only help to decongest roads and the rail system, but, being a potentially cheaper mode, inland waterways can facilitate market access for farmers and small businesses. A major push by the government is needed to overcome the current cost and time disadvantages of inland waterways, observers say.

In a major tax relief, the presumptive tonnage tax scheme will apply to inland and coastal ship companies rather than the generic income-based tax. Tonnage tax is the global standard and is typically at 5% on a presumptive income for a given tonnage. Further, centres to train youth in inland ship repair are targeted to come up in the hinterland in Varanasi (Uttar Pradesh) and Patna (Bihar).

The Budget has proposed to establish new Dedicated Freight Corridors connecting Dakuni in the east to Surat in the west and operationalise 20 new national waterways (NW) over the next five years starting with the Brahmani-Mahanadhi NW 5. This national waterway can connect mining centres in Talcher to industrial centres and feed Paradeep and Dhamra ports. “Mahanadhi has rich potential for development and cargo carrying. But it needs sustained investment such as in periodic dredging to make this project work,” said Amitabh Kumar, former director general of shipping.

The proposal on container shipping aims to create a globally competitive container manufacturing ecosystem with a budgetary allocation of ₹10,000 crore over a five-year period.

In the past, it was considerably cheaper to import new, empty containers from China than make them in India. There were no BIS standards for the specialised steel needed to make seaworthy containers that Indian steelmakers could use to manufacture the steel. Importing steel added to the costs. Also, quality guarantees could not be ensured. “Now, BIS standards are in place on a par with global and Chinese standards and more institutions have been certified to ensure high quality of containers made in India,” adds Mr. Kumar.

Container makers would like a combination of support measures: in land acquisition, through capex subsidy and a PLI scheme. “The aim should be to ensure that when scaled up, the cost of production of containers comes down to global levels,” says N. Bhanu Prakash, faculty at the Indian Maritime University, Visakhapatnam campus. He adds that mandating the use of Indian-made containers can also be considered.

Union Finance Minister Nirmala Sitharaman on Sunday (February 1, 2026) earmarked ₹20,000 crore in the Budget towards Carbon Capture Utilisation and Storage (CCUS) – a nascent, esoteric stream of research globally, but mooted as necessary to countries’ quest for a zero-carbon future.

CCUS refers to a suite of technologies that capture carbon dioxide (CO₂) emissions from large point sources – such as power plants, steel, cement, chemicals, and refineries – and either use CO₂ as an input for products or permanently store it in geological formations.

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Under the aegis of the Principal Scientific Advisor, an expert committee of the Department of Science and Technology (DST) had submitted a report in December 2025 to analyse what India needed to do regarding CCUS to aid meeting its net-zero goals for 2070. Net zero refers to no net carbon emissions.

The road map

The DST road map positions CCUS as essential for India’s “hard-to-abate” sectors (for instance, iron and steel industries) where deep emissions reductions are difficult through efficiency or renewable substitution alone. Reducing carbon emissions from these sectors has acquired urgency in the light of measures by the European Union to impose indirect tariffs on imports from countries that use higher carbon than its domestic manufacturers to forge iron and steel products.

India’s approach, as outlined by the DST, is explicitly research and development-led rather than deployment first. The road map proposes a three-phase programme focused on pushing CCUS technologies from laboratory scale to pilot and demonstration projects, and eventually to commercial readiness. It prioritises point-source capture – especially from cement, steel, fertilisers, and power generation – and emphasises indigenous technology development, centres of excellence, and shared transport and storage infrastructure. Integration of CCUS into existing industrial facilities – rather than greenfield plants – is a central design principle.

The anticipated costs, according to this estimate, would be around ₹4,500 crore over the next two years. Another tranche of ₹2,000 crore would be needed for demonstration products and geological storage would cost another ₹3,000 crore, the document notes.

An initial allotment of ₹500 crore has been made to the Ministry of Power to commence the research programme.

Move welcomed

Independent experts broadly welcomed the stress on CCUS in the Budget. “The ₹20,000-crore commitment over five years for CCUS, continued support for the National Green Hydrogen Mission, and the introduction of new financial mechanisms for battery energy storage systems and pumped storage together signal a pragmatic approach to addressing emissions from hard-to-abate sectors,” said Arunabha Ghosh, CEO, Council for Energy, Environment and Water.

According to the International Energy Agency, around 45 commercial facilities are already in operation applying CCUS to industrial processes, fuel transformation, and power generation. 

CCUS deployment has trailed behind expectations in the past, but momentum has grown substantially in recent years, with over 700 projects in various stages of development across the CCUS value chain.

In 2023, announced capture capacity for 2030 increased by 35%, while announced storage capacity rose by 70%. This brings the total amount of CO₂ that could be captured in 2030 to around 435 million tonnes (MT) per year and announced storage capacity to around 615 MT of CO₂ per year. 

The labour-intensive textile and apparel sector and the Micro, Small and Medium-scale Enterprises (MSMEs) that were impacted by the geo political developments during the last couple of years got a boost from the Union Budget presented on Sunday (February 1, 2026) with new schemes and higher budgetary allocations.

The textile sector will see almost 25% jump in budgetary allocation for 2026-2027 from the current financial year and the MSME sector will see doubling of budgetary allocation.

Finance Minister Nirmala Sitharaman said Central public sector enterprises (CPSEs) would establish high technology tool rooms in two locations as digitally enabled automated service bureaus that locally design, test, and manufacture high-precision components at scale and at lower cost. A scheme for enhancement of construction and infrastructure equipment would be introduced to strengthen domestic manufacturing of high-value and technologically-advanced equipment and ₹10,000 crore would be allocated during the next five years for a scheme for container manufacturing.

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For the “labour-intensive textile sector”, the government had proposed comprehensive measures that would include a special programme to promote sports goods, a National Fibre Scheme for manmade fibres, silk, wool, etc; mega textile parks developed on challenge mode for value addition to technical textiles; a Textile Expansion and Employment Scheme to modernise traditional clusters with capital support for machinery, technology upgradation and common testing and certification centres. A National Handloom and Handicraft programme would ensure targeted support for weavers and artisans. The Mahatma Gandhi Gram Swaraj initiative would strengthen khadi, handloom and handicrafts, and the Tex-Eco Initiative would promote globally competitive and sustainable textiles and apparels, and Samarth 2.0 would upgrade the textile skilling ecosystem, the Finance Minister said.

Under rejuvenation of legacy industrial clusters, the budget had proposed a scheme to revive 200 legacy industrial clusters; create a dedicated ₹10,000-crore SME Growth Fund to create future champions and top up the Self-Reliant India Fund set up in 2021 with ₹2,000 crore to enable micro units access to risk capital.

Credit guarantee support

The TReDS would be a mandatory transaction settlement platform for all purchases from MSMEs by CPSEs, and a credit guarantee support mechanism would be introduced through CGTMSE for invoice discounting on TReDS platform; GeM would be linked with TReDS, and TReDS receivables would be introduced as asset-backed securities, helping develop a secondary market.

Ms. Sitharaman said the government would facilitate professional institutions such as ICAI, ICSI, ICMAI to design short-term, modular courses and practical tools to develop a cadre of ‘Corporate Mitras’, especially in tier-two and tier-three towns.