India Battery Energy Storage Systems Market to Reach $2,683.0 Million by 2034 | CAGR 25.00% Growth

According to IMARC Group's latest research report, titled "India Battery Energy Storage Systems Market Size, Share, Trends and Forecast by Battery Type, Connection Type, and Region, 2026-2034", the India battery energy storage systems market size reached USD 327.7 Million in 2025. Looking forward, IMARC Group expects the market to reach USD 2,683.0 Million by 2034, exhibiting a growth rate (CAGR) of 25.00% during 2026-2034.

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Market Overview and Growth Drivers

India's battery energy storage systems market is at an inflection point. The country's ambitious target to achieve 500 GW of renewable energy capacity by 2030 has created an urgent need for reliable energy storage solutions. As of early 2025, India's installed battery energy storage capacity stood at approximately 490 MWh, but the Central Electricity Authority projects requirements to surge to 74 GW/411 GWh by 2032-highlighting the enormous growth potential ahead.

The market is witnessing unprecedented tendering activity. In just the first quarter of 2025, standalone energy storage system tenders reached 6.1 GW, accounting for 64% of all utility-scale energy storage tenders and already surpassing the total issuance for 2024. Throughout 2025, various agencies floated tenders to develop projects totaling 17 GW/48 GWh of standalone BESS capacity.

One of the most significant catalysts has been the dramatic reduction in battery costs. Lithium iron phosphate cell prices fell to USD 89 per kWh in Q2 2024, representing a 14% decline from 2023 levels. This price reduction has fundamentally altered project economics-the capital expenditure for a 100 MWh utility project dropped from USD 40 million in 2022 to approximately USD 30 million in 2024, pushing levelized storage costs below INR 5 per kWh in high-utilization applications.

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Technology Innovation and Component Trends

The component landscape is undergoing a significant transformation. While battery packs and racks supplied 57.60% of market value in 2025, energy-management software is emerging as a high-growth segment. Software revenue is climbing rapidly as utilities demand sophisticated predictive algorithms that can optimize multiple revenue streams-including arbitrage, frequency regulation, and capacity payments-simultaneously.

The shift toward intelligent energy management reflects the market's maturation. Virtual power plant software is enabling the aggregation of smaller distributed storage systems into coordinated grid services, unlocking new value streams for commercial and residential installations. Cyber-security mandates under draft guidelines IEC 62351 are elevating software requirements, giving companies with robust encryption and intrusion-detection capabilities a competitive advantage.

Innovations in thermal management, second-life battery applications, and advanced energy storage configurations are continuously refining system performance. Automakers and battery manufacturers are integrating smart monitoring technologies with cloud-based analytics, real-time diagnostics, and AI-driven predictive maintenance to enhance battery efficiency and safety.

Government Initiatives Driving Market Expansion

Government support has been instrumental in accelerating market growth. The Viability Gap Funding (VGF) scheme has emerged as a game-changer, offering up to 40% capital expenditure support for standalone BESS projects. This initiative has dramatically improved project viability-recent auctions in Maharashtra (300 MW in August 2024) and Rajasthan (500 MW in November 2024) secured monthly tariffs as low as INR 219,001-221,100 per MW, representing approximately 40% reduction compared to non-VGF projects.

By September 2024, the VGF scheme had sanctioned 1,200 MWh across eight projects valued at INR 4,800 crore, catalyzing USD 580 million of private equity investment. In parallel, the Production Linked Incentive (PLI) program for advanced chemistry cells provides a 6% sales incentive for five years, contingent on 50% local value addition and 5 GWh minimum capacity. Major players including Reliance, Ola Electric, and Rajesh Exports secured 50 GWh of awards in 2024, with first production targeted for late 2025.

These policy measures are strategically designed to reduce India's dependence on imports while building domestic manufacturing capabilities. The initiatives are projected to shrink the landed-cost differential between imported and domestic cells from 22% in 2023 to approximately 8% by 2027.

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Major Project Developments and Industry Milestones

Several landmark projects are reshaping India's energy storage landscape. In March 2025, the country's first large-scale commercial battery energy storage system commenced operations in Kilokri, South Delhi. This 20 MW/40 MWh battery cluster, integrated within the BSES Rajdhani Power Limited substation, delivers four hours of power daily and serves over 12,000 low-income users. The project established a new affordability benchmark with a levelized annual tariff approximately 55% cheaper than prior prices.

In a transformative development, Adani Group made its strategic entry into battery storage with a massive 1,126 MW/3,530 MWh BESS project. Already under construction at the company's Khavda solar complex in Gujarat, this installation is scheduled for commissioning by March 2026 and will support peak load management and energy time-shifting for the grid.

July 2025 witnessed another significant partnership when the International Finance Corporation (IFC) and IndiGrid joined forces to develop a 180 MW/360 MWh standalone battery energy storage system in Gujarat. This project is specifically designed to enhance grid stability and support India's renewable energy integration objectives.

The largest operational BESS as of mid-2025 is NTPC's Ramagundam integrated solar-plus-battery project, featuring 33 MW/132 MWh capacity. Meanwhile, NTPC has floated India's largest tender to develop 2,500 MW/10,000 MWh of standalone BESS at various thermal stations, with each station receiving 500 MW/2,000 MWh capacity configured in two 250 MW blocks.

Manufacturing capabilities are also expanding rapidly. In July 2025, Exide infused USD 12 million into its lithium battery division, Exide Energy Solutions Ltd (EESL), to support development of a 12 GWh greenfield lithium-ion cell and pack manufacturing facility. Commercial production in Phase-1 (6 GWh capacity) is expected by the end of FY 2025-26. Similarly, Amara Raja signed a licensing agreement with Gotion-InoBat-Batteries for lithium-ion battery cell technology to establish gigafactory facilities in India.

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Electric Vehicle Infrastructure Driving Storage Demand

India's burgeoning electric vehicle ecosystem is creating substantial demand for battery energy storage solutions, particularly for charging infrastructure and emerging vehicle-to-grid (V2G) applications. The expansion of fast-charging stations requires grid-connected storage systems to manage load fluctuations and ensure stable power supply during peak demand periods.

Electric vehicle sales in India have demonstrated impressive growth, rising from 1.24 million units in 2023 to over 2 million units in 2025. India is targeting 30% EV penetration by 2030, which will significantly amplify energy storage requirements across the transportation sector. Battery swapping networks, gaining particular traction among two- and three-wheelers, are integrating modular storage solutions to enhance operational efficiency and reduce charging wait times.

Second-life battery applications are emerging as an innovative solution. In October 2024, JSW MG Motor India, in partnership with Vision Mechatronics, unveiled an industrial UPS system powered by repurposed EV batteries under 'Project Revive.' This initiative exemplifies the concept of circular economy by extending the lifetime of EV batteries and giving them a second life in energy storage applications.

India Battery Energy Storage Systems Market Segmentation

Battery Type Insights:

✤ Lithium-ion
✤ Lead-acid
✤ Flow
✤ Others

Connection Type Insights:

✤ On-grid
✤ Off-grid

Regional Insights:

✤ North India
✤ South India
✤ East India
✤ West India

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