Daily Editorial Analysis 18 March 2026

A Bit of a Blur Over India’s New Carbon Credit Plan

Context

• The Union Budget 2026 has sparked significant debate following the announcement of a ₹20,000 crore allocation for a carbon credit programme and this has led to widespread confusion regarding its intended purpose.
• A key question has emerged: Is the allocation meant to support industrial carbon capture technologies, or is it designed to create a new income stream for farmers through carbon credits?
• While official documents indicate a clear industrial focus, an alternative narrative has gained traction, highlighting both a communication gap and a broader policy opportunity.

The Official Framework: Focus on Industrial Decarbonisation

• CCUS for Hard-to-Abate Sectors
  • The foundation of the Budget announcement lies in the R&D Roadmap for Carbon Capture, Utilisation, and Storage (CCUS), released by the Department of Science and Technology (DST) in December 2025.
  • This document clearly identifies its target sectors: power, steel, cement, refineries, and chemicals.
  • These industries are categorised as hard-to-abate because their emissions are concentrated and difficult to eliminate through renewable energy alone.
  • The ₹20,000 crore allocation is intended to support large-scale deployment of CCUS technologies.
  • These technologies capture carbon dioxide emissions directly from industrial sources and either repurpose or store them underground, thereby reducing overall emissions.
• Exclusion of Agriculture from CCUS
  • A crucial aspect of the roadmap is the explicit exclusion of agriculture from CCUS strategies.
  • Although agriculture contributes to greenhouse gas emissions, primarily methane and nitrous oxide, it does so in a diffuse and biologically driven manner.
  • This makes it unsuitable for point-source carbon capture technologies.
  • Instead, agriculture is associated with Carbon Dioxide Removal (CDR) strategies, such as soil carbon sequestration, agroforestry, and biochar.
  • These approaches focus on removing existing carbon from the atmosphere rather than capturing emissions at their source.

The Counter-Narrative: Farmers as Beneficiaries

• Emergence of the Farmer Carbon Credit Idea
  • Despite the clear industrial intent, a competing narrative has emerged in media and public discourse.
  • This perspective suggests that the Budget allocation will enable farmers to earn carbon credits by adopting sustainable agricultural practices.
  • The idea of turning farms into climate solutions has gained popularity due to increasing awareness of environmental sustainability and rural income diversification.
• Link to Voluntary Carbon Markets
  • This narrative draws support from the growing voluntary carbon market, where agriculture and forestry projects are already generating carbon credits.
  • Several private and state-level initiatives are experimenting with models that reward farmers for improving soil health and increasing carbon sequestration.
  • However, these developments are separate from the government-funded CCUS initiative, leading to a conflation of two distinct concepts.

Root Cause of the Confusion: Policy Language and Misinterpretation

• The confusion largely stems from the use of the broad term carbon credit programme in the Budget.
• While technically accurate in a general sense, this phrasing lacks specificity and has blurred the distinction between industrial carbon capture and agricultural carbon sequestration.
• The DST roadmap provides a precise and sector-specific framework, but the Budget’s language has created expectations of a more inclusive scheme, particularly among stakeholders in the agricultural sector.

Policy Implications and Opportunities

• Need for Clear Communication
  • The government must address this ambiguity by clearly communicating the objectives and scope of the CCUS programme.
  • Ensuring that stakeholders understand the industrial focus of the allocation is essential to avoid unrealistic expectations.
• Potential for Agricultural Carbon Markets
  • At the same time, the debate highlights a significant opportunity. India’s vast agricultural landscape offers immense potential for carbon sequestration.
  • A dedicated policy framework for agricultural carbon credits could provide farmers with an additional income stream while contributing to climate goals.
  • However, such a programme would require separate funding, institutional mechanisms, and regulatory structures, distinct from the technology-intensive CCUS initiative.

The Way Forward: Towards a Multi-Sectoral Climate Strategy

• The current situation underscores the need for a comprehensive approach to climate policy.
• Industrial decarbonisation through CCUS is essential, given that heavy industries contribute significantly to India’s emissions.
• Simultaneously, agriculture can play a vital role in carbon removal and sustainability.
• Balancing these two fronts, industrial emissions reduction and agricultural carbon sequestration, will be key to achieving long-term climate objectives.

Conclusion

• The controversy surrounding the Union Budget 2026 reflects both a misunderstanding and an opportunity.
• While the ₹20,000 crore allocation is clearly aimed at industrial decarbonisation through CCUS, the parallel narrative around farmers reveals a growing interest in agricultural carbon markets.
• To move forward effectively, the government must clearly distinguish between these two domains while advancing both with equal commitment.
• By doing so, India can develop a holistic, multi-sectoral strategy that addresses emissions from industry while unlocking the environmental and economic potential of its agricultural sector.

A Bit of a Blur Over India’s New Carbon Credit Plan FAQs

Q1. What is the main purpose of the ₹20,000 crore allocation in Union Budget 2026?
Ans. The allocation is primarily meant to support Carbon Capture, Utilization, and Storage (CCUS) technologies for industrial decarbonisation.

Q2. Which sectors are targeted under the CCUS programme?
Ans. The programme targets hard-to-abate sectors such as power, steel, cement, refineries, and chemicals.

Q3. Why is agriculture excluded from the CCUS framework?
Ans. Agriculture is excluded because its emissions are diffuse and not suitable for point-source carbon capture technologies.

Q4. What caused confusion about the carbon credit programme?
Ans. The confusion was caused by the broad use of the term “carbon credit programme,” which led to misinterpretation.

Q5. What opportunity does the debate highlight for farmers?
Ans. The debate highlights the potential for developing a separate agricultural carbon credit market to provide farmers with additional income.

Source: The Hindu

India’s West Asia Reset, More Sinned Against Than Sinning

Context

• India’s West Asia policy has sparked domestic debate, prompting the need for an objective assessment focused on key trends, given the significant national interests involved.

Two Key Trends Shaping India’s West Asia Policy

Rising Diplomatic Engagement with West Asia

• Over the past decade, India has significantly deepened engagement with West Asia. PM Modi made 15 visits to GCC countries, along with visits to Israel (twice), Iran, and Palestine.
• India signed Comprehensive Economic Partnership Agreements (CEPA) with the UAE and Oman, and is negotiating similar deals with the GCC and Israel.
• The GCC is India’s largest socio-economic partner, with:
  • $160+ billion bilateral trade
  • 10 million Indian diaspora
• Key outcomes
  • De-hyphenation with Pakistan in West Asia policy
  • Stronger defence and security ties
  • India’s image as a responsible status quo power
  • However, promised investments from the region have lagged.

Changing Security Dynamics in the Gulf

• Gulf monarchies prioritise external partners based on their ability to ensure: regime security → state stability → regional balance.
• Since October 2023, escalating conflict and the closure of the Strait of Hormuz, along with Iranian drone and missile threats, have intensified insecurity.
• This has led GCC countries to reconsider reliance on the traditional U.S.-led “Pax Americana” and search for alternative security partnerships.

India’s Diplomatic Reset in West Asia

• India’s recent policy shift reflects recognition of both trends.
• Focus on strategic alignment with key West Asian countries.
• Key initiatives:
  • PM Modi’s visit to Israel
  • Direct outreach to GCC leaders during early conflict phase
  • Engagement with Iran as well
• Signals:
  • India’s support for regional security and stability
  • Prioritisation of core national interests

Features of the New Diplomatic Doctrine

• Shift towards “hard diplomacy” and realism
• Departure from traditional balancing:
  • No reiteration of “please-all” positions
    • India refrained from adopting a balancing stance on sensitive issues such as the two-state solution and Iran’s nuclear ambitions.
  • No reliance on third-party narratives
• Reflects greater strategic confidence and autonomy in foreign policy

Domestic Criticism of the Policy Reset

• Key concerns raised
  • Timing of Israel visit (just before conflict escalation)
  • Perceived dilution of support for Palestine and Iran
  • Alleged alignment with Western interests
  • Risk of strategic overreach and security exposure
• Government’s Defence of the Approach
  • Visit timing likely pre-scheduled, without foreknowledge of conflict escalation
  • West Asia’s volatile environment makes retrospective criticism (hindsight bias) easier
  • The visit was primarily bilateral, not linked to impending military developments

Global Responses and Selective Criticism

• Criticism of India’s policy “immorality” is misplaced; other powers show greater inconsistency:
  • China imported nearly 90% of sanctioned Iranian oil, offering only rhetorical support.
  • Russia, despite a 20-year strategic pact with Iran, has underdelivered.
  • Pakistan shifted from aggressive rhetoric to aligning with the U.S.
• Many Arab and Muslim countries remained largely silent during the Gaza conflict.

India’s Policy Reset: Gains and Risks

• Recognition of Geopolitical Shifts
  • India’s reset reflects changing power dynamics in West Asia.
  • However, the shift may have tilted excessively, requiring recalibration toward balanced national interests.
• Need for Strategic Flexibility
  • West Asia remains highly volatile (mercurial).
  • India must keep diplomatic options open rather than over-aligning with any one side.
• Importance of Key Regional Relationships
  • The Palestine issue remains politically and diplomatically significant.
  • Iran remains crucial for India:
    • Key oil supplier
    • Potential market for trade, reconstruction, and services
    • Strategic location bordering Pakistan and Afghanistan
  • Emerging Regional Fault Lines
    • Growing Arab discomfort with U.S.-Israel actions
    • Saudi–UAE tensions
    • Iraq–Iran estrangement
    • Increasingly assertive roles of Pakistan and Türkiye
    • These trends require a more nuanced and inclusive Indian approach.
  • Gaps in India’s Response
    • Delayed and Limited Engagement – India could have responded faster to key developments like:
      • Assassination of Iran’s Supreme Leader
      • Leadership transition in Iran
    • Need for Diplomatic Assertiveness
      • India should avoid excessive political correctness and silence.
      • Diplomatic flexibility allows disagreement without damaging ties with the U.S. or Israel.
    • Expanding Relief Efforts
      • India could have provided greater humanitarian assistance to populations affected by the conflict.

Strategic Opportunities for India in West Asia

• Erosion of the “Oil-for-Security” Model
  • The U.S.-led “Oil-for-Security” arrangement with GCC states is weakening amid the ongoing conflict with Iran.
  • The U.S. acted without consulting GCC countries, ignoring their concerns.
  • American military bases in the Gulf became targets of Iranian retaliation, exposing regional vulnerabilities. GCC states now fear U.S. unpredictability and possible withdrawal.
  • This may push them to diversify security partnerships, potentially including India.
• Economic Realignment and “GCC+1” Strategy
  • Iranian attacks have disrupted supply chains and business activity in the Gulf.
  • The GCC’s image as a stable economic hub has been weakened.
  • There is growing interest in a “GCC+1” diversification strategy.
  • India can position itself as a reliable economic and investment destination, attracting: Capital; Talent.
  • This presents a historic opportunity to reclaim economic advantages previously lost to Gulf economies.
• Need for a Realist and Dynamic Foreign Policy
  • India’s foreign policy must be:
    • Realistic and interest-driven
    • Flexible and adaptive
    • Consistent yet responsive to change
  • As India’s West Asia policy evolves, it must prioritise national interest over fixed alignments, echoing the principle:
    • Nations have no permanent allies or enemies—only permanent interests.

India’s West Asia Reset, More Sinned Against Than Sinning FAQs

Q1. What are the two key trends shaping India’s West Asia policy?

Ans. India’s policy is shaped by rising diplomatic engagement with GCC countries and changing Gulf security dynamics, including reduced reliance on the U.S. and search for alternative partnerships.

Q2. How has India’s diplomatic approach in West Asia changed recently?

Ans. India has shifted to a more assertive, interest-driven “hard diplomacy,” moving away from traditional balancing and adopting clearer positions aligned with strategic and security priorities.

Q3. What criticisms have been raised against India’s West Asia policy reset?

Ans. Critics cite timing of Israel visit, perceived abandonment of Palestine and Iran, alignment with the West, and risks of strategic overreach and increased security exposure.

Q4. Why is Iran still strategically important for India?

Ans. Iran remains vital as an oil supplier, trade partner, and strategic link to Central Asia, given its geographic position bordering Pakistan and Afghanistan.

Q5. What opportunities does the West Asia crisis present for India?

Ans. The crisis offers India opportunities to diversify Gulf security ties, attract global capital under a “GCC+1” strategy, and strengthen its role as a stable economic alternative hub.

Source: TH

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