India’s storage mandate, combined with incentive-backed manufacturing and growing renewables, creates a rare window to build a competitive BESS industry. Realizing this vision will require securing long-term raw material contracts, deploying advanced automation technologies, and establishing robust training ecosystems, writes Ankit Singhal, CEO and Co-founder, Mappes.io.
India’s Ministry of Power’s decisive step to mainstream energy storage by mandating co-locate energy storage systems with future solar projects has done more than stabilize the grid—it has created a guaranteed demand pipeline that can unlock large-scale domestic BESS manufacturing.
Each tender will now require a minimum of two-hour storage capacity, equivalent to 10 percent of the project size. This move, expected to add around 14 GW/28 GWh of storage by 2030, directly addresses intermittency challenges while ensuring peak demand support.
Government Push – Laying the Groundwork for Domestic Capacity
India has responded with structured support.
The Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC) allocates INR 18,100 crore to boost gigawatt-scale battery production with increasing domestic content. Complementing this, a second tranche of Viability Gap Funding (VGF)—worth INR 5,400 crore—is targeted to establish 30 GWh of BESS capacity across 15 states by 2028.
Simultaneously, storage systems have become integral to renewable tenders issued by SECI, NTPC, and state distribution companies, confirming that BESS is no longer optional in energy planning.
Market Drivers – Policy, Seasonality, and EV Momentum
Mandating storage embeds demand into the system and gives manufacturers confidence in long-term returns. Energy storage is now critical for managing peak load stress, especially as states like Maharashtra and Uttar Pradesh record new highs in electricity consumption. BESS allows excess solar output to be stored and dispatched during evening peaks—thereby stabilizing the grid.
Meanwhile, the expanding electric vehicle (EV) market is reinforcing battery ecosystem growth. Since EV and stationary storage share battery technologies and supply chains, synergies will further reduce costs and accelerate adoption.
Current Players and New Entrants — Filling the Gap
India’s BESS manufacturing sector is still nascent.
Lineage Power has taken the lead with a fully automated 5 GWh plant in Bengaluru tailored for utility-scale systems. Exide Energy Solutions is building a 12 GWh lithium-ion cell plant in Karnataka. Reliance New Energy’s cell-to-pack facility in Jamnagar has a planned initial capacity of 5 GWh, with scaling intentions up to 50–100 GWh by decade’s end. In parallel, JSW Energy, in partnership with LG Energy Solution, is designing a 10 GWh capacity plant expected by 2026.
Despite these developments, domestic production remains focused mainly on module and pack assembly rather than full-scale cell manufacturing. This represents a gap and a clear opportunity.
New entrants that can secure critical raw material flows—primarily lithium, cobalt, and nickel—stand to gain. Partnerships with global technology providers can accelerate capability-building. Automation investment will be essential to deliver consistently high-quality volume. Equally important is early investment in workforce development. Experts in process engineering, quality control, and safety protocols are scarce but vital. Manufacturers must design operations not only for domestic orders but also with regional export potential in mind.
Challenges and Risks — Addressing Blind Spots
There are structural challenges.
India currently has no large-scale domestic sources for key battery materials, leaving supply chains exposed. Project timelines often get delayed, frustrating scale-up plans. The sector also contends with a shortage of specialized battery manufacturing talent and a need for mandated institutional financing. Even with sense-making incentives, real progress requires disciplined execution and accurate demand forecasting.
What the Next Three to Five Years Demand
India’s storage mandate, combined with incentive-backed manufacturing and growing renewables, creates a rare window to build a competitive BESS industry. Realizing this vision will require securing long-term raw material contracts, deploying advanced automation technologies, and establishing robust training ecosystems.
If these elements align, India can move from assemblage of imported cells to self-reliant gigafactory-scale production—achieving energy security and enhancing its presence in the global clean energy supply chain.