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Battery energy storage in India is currently in its high-growth phase. According to the Ministry of New and Renewable Energy (MNRE), India surpassed 250 GW of non-fossil power installed capacity in 2025. The government targets to reach 500 GW of non-fossil capacity by 2030.

According to the National Electricity Plan (2023) by the Central Electricity Authority (CEA), India is expected to require nearly 208 GWh of battery energy storage systems by 2030. This growing demand positions India at the forefront of the battery energy storage revolution.

Thus, let us break down the opportunities and challenges that foreign energy companies must be aware of before entering this sector.

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Overview of India’s Battery Energy Storage Sector

The energy storage sector in India aims to reach 500 GW of renewable capacity by 2030. To meet this target, the CEA (Central Electricity Authority) anticipates a requirement of 32 GW/160 GWh battery storage by 2030.

India added around 44.51 GW of renewable energy capacity till November, 2025. Solar power is a major contributor to this capacity. For example, solar energy storage capacity reached 132.85 GW in November 2025, up from 94.17 GW in November 2024, an increase of 41%.

The CEA estimates that India’s peak electricity demand will cross 335 GW in FY 2029-30. However, solar generation drops to near zero after sunset. This creates an energy production gap during evening hours. The government is focusing on establishing renewable energy storage in India to address this mismatch.

For instance, a 10 MWh battery project in Delhi has been used to manage the load. In rural areas, hybrid solar pumped storage systems are being established for a 24/7 power supply.

All these milestones reflect that the Battery Energy Storage System or India Battery Energy Storage System (BESS) market is shifting from pilots to utility-scale projects. This growth mirrors the market maturity of India’s battery energy storage sector.

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Investment and Growth in India’s Battery Energy Storage Sector

The battery energy storage sector in India aims to attract an investment worth USD 58 billion by 2032. Between 2022 and 2032, India is likely to include more than 47 GW of battery storage capacity, rounding a total investment of USD 42 billion. These activities are strongly backed by policy support and utility tenders. 

Take a look:

●   India’s ACC Battery PLI Scheme

In 2021, the Union Cabinet approved a budget for India’s ACC Battery PLI scheme, which is a major driver for battery energy storage in India. The scheme has a budget of USD 1.94 billion to establish 50 GWh of domestic battery manufacturing capacity.

The scheme requires a minimum 25% domestic value addition, increasing to 60% over time. This means foreign companies must localise manufacturing. For example, an Indian conglomerate, through its subsidiaries, is planning to set up a 20 GWh gigafactory in Gujarat under this scheme.

●       NTPC, SECI and State DISCOMs

NTPC, SECI and State DISCOMs (Distribution Companies are entities responsible for distributing electricity to consumers) are increasingly adopting India’s revolutionary battery storage approach. In 2025, NTPC issued a tender to build 2,334 MWh of battery energy storage systems in Bihar, Maharashtra, Andhra Pradesh, Karnataka, and Telangana.

In 2025, SECI (Solar Energy Corporation of India Limited is the foremost Navratna CPSU dedicated to the growth and development of Renewable Energy (RE) capacity in India) reached a record of 60 GW of Power Sale Agreements (PSAs) of Renewable Energy (RE) capacity. Many states are bundling storage with renewable tenders.

For example, in 2026, the West Bengal State Electricity Distribution Company launched a tender to create 2,000 MWh battery storage systems.

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What are the Opportunities for Foreign Companies?

Between 2022 and 2025, India auctioned standalone and hybrid battery energy storage systems of around 12.8 GWh. This provides foreign companies with a massive opportunity for technological supply and infrastructural expansion.

1. Manufacturing Partnership and Technology Transfer

India plans to achieve 50 GWh of battery manufacturing under the PLI scheme. However, the installed capacity as of 2025 is at 1.4 GWh (2.8%). Foreign companies can enter the market to fill this gap through joint ventures. For example, global battery firms can partner with Indian conglomerates to set up gigafactories.

2. Grid Scale Utility Projects (EPC, IPP and Standalone Projects)

India is expected to deploy over 47 GW of storage by 2032. This translates into hundreds of large-scale projects. For example, a single 1 GWh project can require an investment of USD 536 million. This creates large EPC and IPP opportunities. Foreign companies can participate in this venture through SECI and NTPC tenders.

3. Software Storage Solutions (BMS and EMS Software)

Battery systems rely heavily on software. Building Management Systems (BMS) and Energy Management Systems (EMS) systems control performance and safety. India’s software capability in battery storage solutions is still developing. Predictive analytics for battery degradation is not widely deployed.

Foreign companies can leverage this opportunity, offering AI-based optimisation tools to improve battery life and reduce operational costs.

4. Recycling and Second Life Applications

India’s Li-ion battery capacity demand is expected to exceed 150 GWh annually by 2030. This will generate large volumes of used batteries. EV batteries can be reused for stationary storage after 70% to 80% capacity remains. This creates second-life applications. Foreign companies with recycling technology can take part in this.

5. Thermal Management and Safety Systems

India is a summer-first nation. In some states, the temperature even exceeds 45-degree celsius during summer. High heat significantly impacts the battery capacity.

This makes thermal management and fire safety systems a must for energy storage projects.

6. Financing and Project Development

India must include 300 GW of renewable energy capacity by 2030 to bridge the gap between current capacity and the goal of achieving 500 GW by 2030. However, domestic financing is limited.

IREDA has increased its lending for renewable projects by 20%, to around USD 3.23 billion in 2025. However, demand still exceeds supply. Foreign financial institutions can fill in this gap, offering capital and structuring expertise.

7. Testing, Certification and Quality Assurance

India currently has limited advanced battery testing labs. BIS certification is mandatory, but the infrastructure is insufficient. Testing delays can extend project timelines. IEC compliance is also required for global standards. However, few labs in India can perform full-scale testing. This creates a high-margin opportunity for foreign firms.

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6 Strategic Incentives to Drive India’s Drive Energy Sector

1. Customs Duty Waivers: In the Union Budget 2026-27, the government has waived customs duty on solar glass inputs, critical minerals processing equipment and lithium battery cell machinery. This significantly reduces the overall project cost of battery energy storage.
2. ISTS Charge Waivers: The Central Electricity Regulatory Commission (CERC) waived the Interstate Transmission (ISTS) charge up to June 2028 for energy storage projects.
3. Viability Gap Funding: The Union Cabinet approved a budget of USD 403 million under the Viability Gap Funding (VGF) Scheme to BESS projects of a maximum capacity of 13,200 MWh.
4. PM Surya Ghar Scheme: The scheme targets 1 crore rooftop solar installations by 2027. Households can reduce electricity bills significantly by the utilisation of solar power and selling excess power back to the grid.
5. National Framework for Promoting Energy Storage Systems: This framework attracts foreign investment to encourage India’s energy storage capacity. It supports deployment across grid-scale, commercial and residential segments.
6. RPO + BESS Mandate in New Tenders: As per the RPO, DISCOMs must purchase a minimum, increasing percentage of their electricity from renewable sources (24.3% in 2023 up to 43.3% by 2030.

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What are the Key Challenges Foreign Companies Must Navigate?

Despite all these infrastructure developments, policy backing and financial incentives, there are certain challenges that foreign companies must navigate. Take a look:

● Domestic Content Requirements under ACC Battery PLI

Foreign firms must meet 25-60% localisation norms under the ACC Battery PLI scheme, increasing the overall costs and complexity. They should build local supply chains to reduce long-term costs.

● ALMM (Approved List of Models & Manufacturers)

ALMM approval is mandatory for participating in government tenders. Companies should initiate approvals early and align with BIS and IEC standards to complete the formalities quickly.

● State vs. Centre Policy Misalignment

Energy policy varies across states. Some DISCOMs are slow to adopt storage due to cost concerns, despite the central government's push. This creates uneven market opportunities. Foreign firms should prioritise progressive states and central agency tenders like SECI or NTPC.

● Price Competition from Chinese BESS Players

Chinese BESS suppliers offer lower prices, creating intense competition in tenders. Foreign ventures must focus on battery life, better safety protocols, and advanced software to justify pricing in India’s competitive bids.

● Grid Interconnection Delays

Transmission bottlenecks can delay projects, especially in renewable-heavy states. This impacts returns and execution timelines. Companies should select sites with ready grid infrastructure to avoid delays.

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How Tecnova helps Foreign Companies to Enter the Battery Energy Storage Market in India?

Tecnova provides data-driven market entry support to foreign companies interested in entering India’s battery energy storage sector. We:

●   Track policy changes and investment trends in real time

●   Aid in partner identification by connecting Indian manufacturers and developers

●   Assist with regulatory approvals, including BIS certification and compliance processes.

With deep expertise in battery energy storage in India, Tecnova helps foreign companies reduce entry risks and capture opportunities in this rapidly growing market.

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