The India Energy Storage Alliance (IESA) and leading clean energy experts have welcomed the Union Budget 2026-27’s ambitious push for energy storage and battery manufacturing but asked for clear operational frameworks to drive the country's clean energy push ambitions.

 

Key measures highlighted include the Rs. 40,000 crore enhancement to the ECMS, explicit BCD exemptions for Battery Energy Storage Systems (BESS), dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu, ISM 2.0 for semiconductor manufacturing, three Chemical Parks for battery chemicals, and the deployment of 4,000 electric buses in the Northeast.

 

However, the alliance warned of critical gaps in the government’s plan, including no allocations for lithium and nickel refining, missing incentives for the recycling industry, and the absence of GST reduction on water electrolysers from 18% to 5%. IESA has submitted targeted policy recommendations to address these issues.

 

Debmalya Sen, President of IESA, stressed the need for clear operational guidelines. "We welcome the government's comprehensive approach to boost energy storage and battery manufacturing. To ensure effective implementation, IESA recommends issuing detailed operational guidelines for the Chemical Parks within 90 days, specifying land allocation, infrastructure timelines, and incentive structures for battery chemical manufacturers. 

 

"We urge the government to create a dedicated BESS category within the Infrastructure Risk Guarantee Fund, with sector-specific risk-assessment parameters."

 

On green hydrogen, IESA noted that the Rs. 600 crore allocation for the National Green Hydrogen Mission—triple the revised 2025-26 budget—signals an expected extension of the PLI electrolyser manufacturing deadline. Yet, operational support mechanisms and sector-specific skilling initiatives remain inadequate.

 

Vinayak Walimbe, Managing Director of Customized Energy Solutions, highlighted gaps in the BCD exemption policy. 

 

"While the BCD exemption on capital goods for ACC manufacturing equipment is a positive step, it falls short of addressing the complete value chain. This exemption must be extended to ACC component manufacturing equipment to fully strengthen domestic capabilities. We need targeted incentives for brownfield expansion of existing facilities and dedicated budgetary support for ACC component manufacturing, which is a critical policy gap that continues to hinder India's battery ecosystem development."

 

The budget also offers incentives for solar energy and domestic manufacturing, according to Avishek Kumar, Founder of Sunkonnect. "We welcome the Union Budget 2026 as a positive step for India-based renewable energy companies."

 

"The record ₹12.21 lakh crore capital expenditure outlay and 29% increase for PM Surya Ghar create good visibility for solar investments and domestic manufacturing scale-up. The customs duty rationalisation to 20% on solar cells and modules, along with BCD exemption on sodium antimonate for solar glass, will support local production capabilities. However, while the reduction in BCD will help manage local production, it may not significantly reduce costs; further measures will be needed to improve affordability," he added.

 

On energy transition strategy, Gaurav Aggarwal, Co-Founder of GoodEnough Energy, said, "Union Budget 2026 delivers a strong policy push for India's battery energy storage and domestic manufacturing ambitions. This Budget positions manufacturing at the heart of India's energy transition and aligns directly with our strategic roadmap to accelerate affordable, reliable, and sustainable energy solutions across India. 

 

"To maximise these opportunities, we recommend prioritising BESS integration mandates in renewable energy projects and streamlining approval processes for grid-scale storage deployments, as we remain optimistic about the country's trajectory toward a resilient, decarbonised energy future."

 

Akhilesh Bagaria, Co-Founder of NavPrakriti, emphasised the importance of battery recycling. "We welcome the full customs duty exemption on waste and scrap of lithium-ion batteries, which addresses critical challenges around feedstock availability. As India positions itself as a hub for lithium-ion cell manufacturing, a robust recycling ecosystem becomes essential for long-term mineral security and circularity in the battery supply chain. 

 

"However, rationalising GST rates on waste recycling operations remains critical to improving economics and accelerating the transition toward a truly circular and self-reliant battery ecosystem that strengthens the Make in India agenda."

 

While experts believe the Budget could be further strengthened with extended PLI schemes for advanced battery chemistries, green hydrogen infrastructure, and GST rationalisation for battery recycling, they agree it marks a transformative moment for India’s clean energy ecosystem.