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From Imports to Integration: Is India Ready to Manufacture BESS at Scale?

As BESS deployment accelerates, can India build a globally competitive manufacturing ecosystem while meeting its growing storage demand? Industry leaders provide a BESS market pulse on domestic demand, market readiness, policy support needed and localisation strategies.

August 31, 2026. By Mrinmoy Dey

India’s renewable energy capacity has reached 288.58 GW as of June 2026. Solar (162.15 GW) and Wind (57.44 GW) contribute 219.59 GW – approximately 76 percent of the total installed RE capacity. Integrating such a large share of variable energy necessitated rapid deployment of energy storage systems.

To support this, as of H1 2026, 8.7 GWh of battery energy storage systems (BESS) have been installed, of which 7.1 GWh of capacity have been added in H1 itself, according to a report by India Energy Storage Alliance (IESA). Further, about 53 GWh of BESS projects are under execution.

The debate is no longer about the need for BESS, but whether India can manufacture it at scale while balancing rapid deployment with domestic manufacturing and reducing import dependence.

A Market Ready for Take-Off

India's storage market has undergone a dramatic transformation over the past two years. According to IESA, India is on track to cross 10 GWh of installed BESS capacity by December 2026. While India has floated ESS tenders of about 47 GWh, IESA estimates the total ESS tender pipeline at 260 GWh.

According to Central Electricity Authority (CEA) estimates, India would require as much as 74 GW/411 GWh of energy storage till 2031-32, of which almost 47 GW/236 GWh would be BESS. CEA projects 888 GWh of ESS requirement by 2035-36.

Dhruv Garg, Energy Finance Analyst, IEEFA, says, “Overall battery demand is projected to expand at a 36.5 percent CAGR to about 272GWh by FY2030, creating adequate volume for a domestic manufacturing base, but the real concern is that this growing demand is being met largely through imported cells because India still lacks sufficient domestic manufacturing capacity, which heightens long-term import dependence.”

While utility-scale procurement remains the primary demand driver, the commercial and industrial (C&I) segment is emerging as the next growth frontier. As per an IESA projection, India's C&I energy storage market will grow from less than 1 GWh in 2025 to 23-31 GWh by 2032.

Priya Selvaraj, Vice President, Global Business Development – Renewable Power, ABB India, remarks, “The C&I segment will be equally important. Customers such as data centres, hospitals and metros compete on reliability, resilience and power quality, not just cost. Utility-scale projects provide manufacturing volume, but C&I set the benchmark for system performance.”

Ayush Misra, Co-Founder and CEO, AmpereHour Energy, adds, “The C&I segment will be a major growth driver as businesses increasingly look for energy resilience, lower electricity costs, and greater control over their energy consumption. As Time-of-Day tariffs, open access, and renewable integration become more prevalent, storage will become a strategic business asset rather than just a backup solution. This demand provides the confidence required for long-term investments in domestic manufacturing.”

Vatsal Kundalia, Managing Director, Advait Greenergy, highlights that manufacturing facilities, data centres and other energy-intensive industries are increasingly looking at storage not only for renewable integration but also for improving energy reliability and managing peak demand. “As this demand becomes more consistent, manufacturers will have the confidence to invest in capacity, automation and product development. A healthy manufacturing ecosystem ultimately needs predictable demand, not just ambitious deployment targets,” he asserts.

How Much Localisation Is Realistic?

The discussion around domestic manufacturing often focuses on complete localisation. In practice, however, localisation can happen in stages.

Dr. Nisha Gnanam, Senior Product Specialist, Feston SEV, states that India is well positioned to localise key segments of the BESS value chain over the next five years, particularly battery pack manufacturing, Battery Management Systems (BMS), Power Conversion Systems (PCS), Energy Management Systems (EMS), and integrated containerised solutions. “Lithium-ion cell manufacturing, however, will continue to require sustained investment, technology partnerships, and secure access to critical raw materials before achieving meaningful self-reliance. At Feston, our focus is on expanding indigenous capabilities across integrated BESS solutions while steadily increasing domestic value addition,” she says.

India already has cost advantages in battery assembly and software-driven BMS, and these segments rely more on domestic engineering, power electronics and system-integration capability than on mineral processing. “Cells will remain import-dependent in the near term: India had about 60 GWh of pack-manufacturing capacity but only about 1 GWh of cell manufacturing by end-2025. Cathode materials, anodes, electrolytes and critical-mineral refining will also remain largely imported because India is estimated to be 5-10 years away from a robust domestic cell ecosystem,” remarks Garg.

Rajesh Kaushal, Head – Energy Infrastructure Business, Delta Electronics India, states that when it comes to manufacturing, the approach should be both honest and ambitious. “Battery cell manufacturing is a long-term journey requiring advanced technology, raw materials, scale and sustained investment. However, battery packs, BMS, PCS, EMS, containerisation and complete system integration are areas where India can build globally competitive capabilities over the next few years. At Delta, 5.5 MW high-power PCS are already being manufactured in India, while local engineering capabilities continue to expand across power electronics and intelligent energy management.”

Selvaraj adds, “As India transitions towards grid-forming technologies, power conversion and controls engineered for weak-grid applications become a product advantage, not simply a compliance requirement or checkbox. ABB's world-class power-conversion manufacturing facility in Bengaluru already builds that capability in India today.”

Misra emphasises, “Over the next five years, the biggest opportunity lies in Pack-to-Container localisation, covering battery pack assembly, container integration, BMS, PCS, HVAC, fire safety systems, EMS, and the complete Balance of System. Even within the pack, 90-99 percent of critical components – such as fuses, PCBs with harnesses, thermal insulation, pressure relief valves, and connectors – are still imported. Building a domestic ecosystem for these components should be the industry's first priority. At AmpereHour Energy, this is precisely where we are investing and expanding our manufacturing capabilities.”

As per a report published by the International Energy Agency (IEA), currently, more than 75 percent of the world's lithium-ion battery cell production is done in China, and China also controls the processing of critical minerals. “Hence, complete supply chain independence from foreign countries will not be achieved in the short run. However, efforts made in the Indian domestic mining and recycling space under the ACC PLI scheme will slowly ease this dependence,” emphasises Anand Kabra, Chairman and Managing Director, GEON.

He further adds, “The BESS ecosystem of India needs to be created through progressive localisation and not through localisation of each and every element at once. Currently, our objective is to produce battery packs, BMS, EMS and system integration in India. This will help us give customised solutions suitable for Indian conditions with high safety standards.”

Talking about phased localisation strategy, Arun Mittal, CEO, VSL PowerHive, a wholly-owned subsidiary of Vikram Solar, informs, “In the first phase, targeted for March 2027, we are setting up a 7.5 GWh BESS assembly facility focused on integrated storage systems and containerisation for utilities, C&I customers, and large renewable projects. The second phase, planned for FY 2028, moves into lithium-ion cell manufacturing, a deeper step toward backward integration. Our goal is not just to manufacture batteries but to build an integrated energy storage ecosystem.”

Surge in BESS Manufacturing

There is a sudden rush among domestic manufacturers from the RE equipment segment – be it the module manufacturer, inverter or small-scale energy storage solutions providers – to foray into BESS. Waaree ESS has recently commissioned a 5.15 GWh BESS container manufacturing facility, and eyes to ramp up capacity to 20 GWh. Premier Energies has broken ground for a 6 GWh BESS plant in Telangana.

Feston SEV has entered the Battery Energy Storage Systems (BESS) segment with a planned manufacturing capacity of 3 GWh annually. INVERGY India has inaugurated a 3 GWh BESS Giga Factory in Dasna, Uttar Pradesh, with an investment of over INR 200 crore. Cosmic PV Power announced its plan to set up a 2 GW lithium-ion battery production line for BESS during REI 2025.

Vikram Solar recently signed an MoU with the Tamil Nadu government to establish a BESS manufacturing facility in Tirunelveli with an investment of INR 15,037 crore. “Customers, today, want integrated solutions combining generation, storage, intelligent energy management, and long-term support. For solar manufacturers, storage is a strategic progression that leverages existing strengths in manufacturing, power electronics, and customer relationships,” remarks Mittal.

AK Shukla, Founder and Managing Director, Sanvaru Technology, adds, “At Sanvaru, we are focused on increasing value addition by localising BMS, EMS, cooling systems and complete containerised BESS solutions. We are also expanding our manufacturing capacity to support the growing demand from utility-scale, C&I, telecom, and AI-ready data Centre applications. Our vision is not just to manufacture batteries, but to build complete, intelligent energy storage systems designed and engineered in India.”

Talking about Neuron Energy’s foray into BESS, the company’s MD, CEO and Co-Founder Pratik Kamdar shares, “We are establishing a fully automated BESS manufacturing facility in Talegaon, Maharashtra, marking our expansion into the grid-scale energy storage segment. Spread across seven acres and backed by an investment of INR 100 crore, the facility will have a planned annual manufacturing capacity of 5 GWh and the capability to produce up to 1,000 containerised BESS units annually. It is designed to serve solar developers, commercial and industrial customers, as well as utility-scale applications across domestic and international markets.”

As per IESA estimates, Li-Ion battery cell manufacturing capacity in India as on date is around 2 GWh, reaching to ~110 GWh by 2030; cell/pack to container capacity is expected to range between 180-200 GWh by 2030.

Policy Support: Is It Enough?

Recognising the strategic importance of batteries, the Ministry of Heavy Industries (MHI) introduced the Advanced Chemistry Cell (ACC) Production Linked Incentive (PLI) scheme to establish 50 GWh of domestic manufacturing capacity. Recently, MHI has invited bids for another 10 GWh of ACC battery storage under the PLI scheme.

The scheme was designed to reduce import dependence while encouraging investments in advanced battery technologies. However, implementation has been slower than anticipated.

For BESS deployment, the Ministry of Power has allotted about INR 9,160 crore as Viability Gap Funding (VGF) support for installation of about 43 GWh of BESS capacity, across two tranches. To push for localisation, MoP has mandated the use of indigenous EMS and 20 percent local content, including EMS.

Garg, however, feels that existing incentives are not yet sufficient to provide confidence for large-scale BESS manufacturing investment. As per an IEEFA report, the ACC PLI scheme had commissioned only 1.4 GWh, or 2.8 percent, of its 50 GWh target, attracted INR 2,878 crore of investment, or 25.6 percent of the target, and disbursed zero incentives as of February 2026. “It would be best to redesign domestic-value-addition requirements to start at 10-15 percent and increase them over seven to eight years, while reducing the minimum bid size to 1-2 GWh to enable smaller technology-led manufacturers to participate,” suggests Garg.

Prateek Srivastava, Business Unit Head, Prostarm, highlights another concern. “Immediate attention is required to address issues in customs clearance, where confusion over the applicable BCD persists. Although battery cells, battery packs and containers attract different duty structures, they often fall under the same HSN code, leading to delays in customs clearance, additional duty payments and penalties for importers.”

He further adds, “Unlike the solar industry, the BESS sector remains heavily dependent on China for lithium cells. The market is also highly volatile, with battery cell prices rising sharply in recent months and price validity remaining very limited. As a result, domestic content is expected to remain at only 30-40 percent of the total order value.”

Garg further adds, “India also needs a separate PLI for cathodes, anodes and electrolytes, plus gradual basic customs duty and anti-dumping measures on imported cells, because domestic production of these upstream components is near zero.”

Should Batteries Have an ALMM?

The success of the Approved List of Models and Manufacturers (ALMM) in promoting domestic solar module manufacturing has naturally triggered discussions about whether a similar mechanism should be introduced for batteries.

“India may consider an ALMM-type framework or phased domestic content requirements, but implementation should be practical and gradual. It should not immediately restrict reliable global supply chains or increase project costs,” states Shukla.

He further adds, “The objective should be to encourage genuine value addition, technology ownership and quality manufacturing in India, rather than merely promoting local assembly. A transparent, performance-based and time-bound localisation roadmap will give manufacturers the confidence to invest at scale.”

Talking about a supportive policy ecosystem, Kabra says, “A list of models and manufacturers (ALMM), along with phased domestic content requirements, can contribute to building domestic manufacturing capacity, if adopted carefully. These policies should help localise production without hindering implementation of projects and limiting access to global technology in the initial stages of industrial growth.”

Talking about how India can approach implementing ALBM, Garg suggests, “In the first phase, ALBM should apply immediately to pack assemblers and system integrators through mandatory safety, warranty, degradation, fire‑safety and cybersecurity standards, where domestic capability already exists. Cell‑level domestic‑content rules should come in only after India has at least 10–15 GWh of operational cell capacity across multiple qualified suppliers, aligned with a 10–15 percent DVA starting point and a seven‑to‑eight‑year ramp‑up, which in turn requires ALBM, a better‑designed PLI and calibrated import protection to work together.”

He further explains, “This way ALBM is introduced first and then linked to a clear, time‑bound DVA trajectory, while complementary mandates and incentives, including targeted R&D collaboration and technology transfer in trade and investment agreements, help domestic cell capacity scale without disrupting near‑term BESS deployment.”

Beyond Manufacturing: Building an Ecosystem

Building a globally competitive battery industry will require investments beyond cell manufacturing, including critical minerals, cathode and anode materials, recycling, testing and certification, fire safety, skilled workforce, R&D and battery management software to strengthen the entire value chain.

Suman Nag, Head - Commercial & Contracts International Division, Envision Energy India, remarks, “True localisation of battery cells and cell chemistry will require sustained investment in R&D alongside manufacturing. Rather than simply replicating the global lithium-ion supply chain, India has an opportunity to build a differentiated competitive advantage by advancing next-generation chemistries such as sodium-ion and other emerging technologies that leverage the country's strengths in research, innovation, and resource availability. Qualified contract manufacturing can play a critical role in accelerating localisation while reducing capital investment and enabling the rapid development of a domestic supply chain.”

Kundalia adds, “A manufacturing facility is only as strong as the ecosystem supporting it. Developing reliable local vendors improves engineering collaboration, reduces lead times, strengthens quality control and makes the entire supply chain more resilient. At Advait, localisation is therefore not limited to manufacturing products. It also includes strengthening the domestic supplier ecosystem that will support long-term growth.”

Kaushal emphasises that the challenges extend beyond manufacturing. “Raw materials, domestic supply chains, financing, technology development and skilled talent will all shape India's BESS ecosystem and require close collaboration between industry and government.”

Balancing Manufacturing with Deployment

India faces the challenge of balancing rapid storage deployment with domestic manufacturing ambitions. While imports can bridge supply gaps to support renewable energy targets, incentives for local manufacturing are needed to reduce long-term dependence on imported batteries and mitigate geopolitical and supply-chain risks.

Misra, however, believes that India does not need to choose between rapid deployment and domestic manufacturing. “Both objectives can progress together through a phased localisation strategy. While global supply chains may continue to support immediate project execution, domestic capabilities in software, power electronics, system integration, digital validation, and advanced manufacturing should steadily expand.”

Kundalia agrees, “Deployment and manufacturing should progress together because one strengthens the other. Rapid deployment creates demand, but demand alone does not create manufacturing capability. Manufacturers need time to qualify suppliers, stabilise production processes, validate products and build engineering expertise. These capabilities cannot be accelerated simply by increasing production volumes. The objective should therefore be to use India's growing domestic market as an opportunity to build globally competitive manufacturing.”

The Path Forward

India's BESS market is entering a critical growth phase, with strong demand and supportive policies driving deployment. The key challenge is scaling domestic manufacturing through phased localisation, supply-chain development and policy support while ensuring affordable storage and long-term self-reliance.

“By 2030, India has the potential to emerge as both a BESS manufacturing and global system integration hub, leveraging its strengths in battery packs, system integration, software, engineering and turnkey energy storage solutions,” states Kamdar.

Srivastava adds, “Lithium carbonate, a critical component in cathode material, plays a vital role in cell manufacturing, which means we will continue to depend on a handful of countries, led by China, for the foreseeable future. In the near term, I believe India is more likely to become a major hub for lithium battery pack assembly and the integration of BESS containers, commonly known as DC blocks.”

Misra opines that India's opportunity is not just to manufacture batteries, but to build intelligent energy storage systems that can compete globally on reliability, safety, and performance.

“India has the potential to emerge as both a global BESS manufacturing and system integration hub. However, localisation must be supported by robust quality systems, product certification, lifecycle service capabilities and digital asset management to ensure the long-term reliability, safety and performance of utility-scale BESS deployments,” asserts Nag.

India’s opportunity is not simply to become the world’s lowest-cost battery manufacturer, but to become a global leader in intelligent energy storage systems. “As renewable penetration increases, advanced power conversion, grid-forming technologies and digital energy management will become increasingly important. By building leadership in these areas, India can establish itself as both a manufacturing base for high-value system components and a globally competitive system integration hub,” asserts Selvaraj.

“By 2030, India should aim to manufacture complete, globally competitive BESS solutions –not necessarily every individual component, but integrated systems that combine storage with renewable energy, EV charging, microgrids and smart grids for both domestic and international markets. That is the real opportunity – not simply manufacturing products but building integrated energy solutions that solve Indian challenges and create value worldwide,” remarks Kaushal.

With demand firmly established, India's next challenge is translating policy support, phased localisation and industrial investment into a globally competitive BESS manufacturing ecosystem.