India’s Union Budget 2026 has delivered a strong policy push for the expansion of Battery Energy Storage Systems (BESS), positioning grid-scale storage as a central pillar of the country’s renewable energy and power grid modernisation strategy.
In a significant fiscal intervention, the government has extended the Basic Customs Duty (BCD) exemption on capital goods used in lithium-ion cell manufacturing to include equipment specifically deployed for BESS applications. The move is expected to lower manufacturing costs, improve project economics, and accelerate domestic production of battery storage systems, thereby strengthening India’s energy storage supply chain.
Industry stakeholders have welcomed the announcement, describing it as a strategic enabler for the rapid deployment of utility-scale BESS infrastructure, which is increasingly critical to stabilising renewable power generation and ensuring round-the-clock electricity supply. With solar and wind capacity expanding at scale, BESS is emerging as a key solution for balancing intermittency, enhancing grid flexibility, and improving system reliability.
The Budget’s focus on battery storage aligns with the government’s broader objectives of enhancing grid resilience, supporting renewable energy integration, and reducing dependence on imported battery components. By easing entry barriers for manufacturers, policymakers aim to stimulate domestic production capacity and establish India as a globally competitive hub for advanced battery technologies and energy storage manufacturing.
In parallel, the removal of customs duty on select critical inputs used across the renewable manufacturing supply chain is expected to further strengthen the economics of integrated solar-plus-storage projects, supporting large-scale adoption of hybrid renewable energy systems.
Experts believe the Budget measures could fast-track the rollout of grid-scale BESS projects, strengthen power system stability, and advance India’s long-term decarbonisation and energy transition targets. As the country advances towards 24/7 renewable power availability, BESS deployment is set to become a cornerstone of national grid planning and clean energy infrastructure development.
The announcement is expected to generate a positive ripple effect across renewable energy developers, storage solution providers, and battery manufacturers, reinforcing investor confidence and positioning India as one of the fastest-growing energy storage markets globally.
