India’s Battery Energy Storage System (BESS) sector is entering a rapid growth phase, supported by rising electricity demand, increasing renewable energy integration and a series of government policy measures. According to the latest Rubix Industry Insights report, BESS is expected to account for a significantly larger share of India’s overall energy storage requirements over the coming years.
The report estimates that BESS will contribute around 42% of India’s total energy storage requirement in FY2026-27, increasing to approximately 57% by FY2031-32. The country’s required BESS energy storage capacity is projected to rise nearly seven-fold, from 34.72 GWh in FY2026-27 to 236.22 GWh by FY2031-32. In terms of power capacity, BESS could account for around 64% of India’s total storage power requirement by FY2031-32.
The market has already shown strong growth in 2026. India added around 8.2 GWh of new BESS capacity between January and June 2026, compared with less than 100 MWh during the corresponding period in 2025. This sharp increase indicates that battery storage is moving beyond early-stage deployments towards larger commercial and utility-scale projects.
The development pipeline is also expanding rapidly. Around 167.58 GWh of BESS projects are currently under construction, awarded or in the tendering stage. This pipeline is expected to provide a strong base for future deployments as developers, utilities and renewable energy companies increasingly use storage to balance intermittent solar and wind generation.
However, BESS deployment remains geographically concentrated. Gujarat and Rajasthan together account for nearly 88% of India’s installed utility-scale BESS capacity. The concentration is largely linked to their large renewable energy portfolios and the growing requirement for storage to manage power generated from solar and wind projects.
Government policy is playing an important role in supporting the sector. Energy Storage Obligations are creating demand for storage, while a proposed 10% battery storage mandate for new solar and wind projects could further expand the market. Viability Gap Funding schemes, exemptions from Inter-State Transmission System charges and the Production Linked Incentive scheme for Advanced Chemistry Cell batteries are also supporting investment.
The recently approved PM-DHARA Scheme is expected to provide additional momentum, with a dedicated INR 500 billion allocation aimed at deploying 50 GWh of BESS by FY2032-33. The initiative is intended to improve grid stability, manage renewable energy intermittency and support efficient evacuation of renewable power.
Private companies are also increasing investments in domestic battery manufacturing. Amara Raja, Waaree Energies, Vikram Solar, Solex Energy and Invergy are among companies investing in gigafactories and battery assembly facilities, strengthening India’s efforts to develop a domestic storage ecosystem.
Despite the strong outlook, the sector faces several challenges. India continues to depend heavily on imported lithium-ion cells, with more than 80% of imports coming from China in FY2026. This creates exposure to international supply disruptions, currency movements and raw material price volatility.
Developers are also facing profitability pressure as competitive bidding pushes storage tariffs downward. In some auctions, tariffs have fallen faster than battery pack costs, potentially affecting project returns. Financing constraints, delays between tenders and completed auctions, and transmission limitations could further slow project execution.
India is estimated to require investments of INR 3.49 trillion to INR 4.79 trillion across the broader energy storage ecosystem to meet its FY2031-32 requirements. Expanding domestic manufacturing, strengthening transmission infrastructure and maintaining policy support will therefore be critical. With rising renewable capacity and increasing private investment, BESS is expected to become a central component of India’s future power system.
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