The government is seeking to mandate at least 50% local content for components, including battery and energy management systems, containers and inverters used in battery energy storage systems (BESS), but excluding cells, the people cited above said on condition of anonymity. Authorities may also introduce a list of approved manufacturers and models, mirroring a policy already in place for the solar industry known as the Approved List of Models and Manufacturers (ALMM).
The power ministry held a consultation with executives of state-owned firms, including NTPC Ltd and Solar Energy Corp, last week. of India Ltd (Seci), as well as private players such as JSW Energy Ltd, Engie SA and Avaada Electro. The consultation sought views on a transition timeline for indigenization, one of the people said, adding that talks were in the early stages and no final decision had been made.
“The government wants to understand if the industry is ready to meet the growing demand and by what time the mandates can be implemented,” the person said. “The ultimate goal is to indigenize the supply chain and reduce the foreign exchange outflow associated with the green energy shift.”
Spokespeople for the Department of Power, NTPC, SECI, JSW Energy, Avaada Electro and Engie did not respond to emailed queries.
Strategic Security and Network
The development comes at a time when India is targeting 47 GW of BESS capacity at cost ₹3.5 trillion by 2032. Components requiring indigenous origin account for around 35% of the cost of these industrial batteries, which are critical to facilitating India’s green energy transition. Since solar and wind projects cannot generate power during cloudy and windless times, BESS helps store electricity and supply it to the grid when needed.
Security concerns are also a key factor. The energy grid faces constant cyber threats. Officials have previously flagged potential vulnerabilities in Chinese-made equipment, particularly in chargers for electric cars and power electronics connected to the transmission grid. A local content mandate and a “white list” of trusted suppliers would allow the state to exercise tighter control over hardware used in critical infrastructure.
The government is especially wary of vulnerabilities. With at least 30 cyber attack attempts reported daily on the national network – many originating from China, Russia and Singapore – the government sees BESS localization as a matter of national security rather than just industrial policy.
The cost of sovereignty
The shift has sparked a debate about the pace of India’s green energy transition. Former power minister Alok Kumar acknowledged the need for localization but warned that aggressive mandates could slow adoption by making projects less funded.
“A balance needs to be seen to be maintained,” Kumar said. “When mandates are implemented, it raises costs, and higher costs can lead to tariff increases and adoption can slow down. So ambitious targets may be affected in the near term. This slowdown should be taken into account and scale-up targets for battery storage may need to be more moderate, as both localization targets and rapid scale-up may not go hand in hand.”
But some analysts suggest the financial impact may be more manageable than industry critics fear. Duttatreya Das, energy analyst for Asia at think tank Ember, noted that previous domestic content requirements (DCRs) for solar modules had not significantly derailed expansion when developers were given enough time.
“As witnessed in the case of the mandates imposed on solar modules and cells, the DCR norms have not seriously affected the expansion as considerable time has been given and prices have also not increased significantly,” Das said. “Overall, I think gradual localization is good for the sector and the economy, apart from looking at immediate spikes in costs.”
Bridging the gap
The proposal follows on from last month’s Ministry of Energy mandate requiring 20% localization for projects under the Viability Gap Funding (VGF) scheme. The goal of this program is to build 30 GWh of storage capacity. The more recent proposal for a 50% mandate would represent a significant escalation of this ambition.
Rupam Raja, head of energy storage at Ampin Energy Transition, a renewable energy company, said a supply chain for non-cell components could be established within 12 to 24 months. “With the right volumes and a favorable duty structure for domestic production, we will create the basis for cost neutrality with imports,” Raja said.
Currently, the Chinese company Contemporary Amperex Technology Co. is among the global leaders in BESS. Ltd. (CATL), the French Engie and the American company Fluence Energy. By forcing these players to either manufacture locally or partner with Indian firms, the government hopes to replicate the success of “Make in India” seen in the automobile and mobile phone sectors.
Scaling up to 2030
China currently dominates the global battery supply chain and controls most of the lithium processing and cell manufacturing. While India has roughly 15 GW of installed BESS capacity, its actual operational footprint is just 700 MWh. This creates a huge gap between the current reality and the Central Electricity Authority’s (CEA) estimate that the country will need 236 GWh of capacity by 2030 to handle intermittent renewable energy.
Despite the small current capacity, the pipe fills. Tendering activity is accelerating at a record pace. About 60 GWh of capacity has been auctioned in 2025, up from 24 GWh in 2024 and just 4 GWh in 2023, according to the India Energy Storage Alliance (IESA).
Debi Prasad Dash, executive director of NetZero Energy Transition Association (Netra), suggested that the government should phase in these value-added norms. “The government should introduce local value addition by components, which will give enough time to build the necessary capabilities,” he said, adding that several startups have already started manufacturing domestic connectors and power electronics.
Alekhya Datta, Fellow and Director of the Electricity and Renewable Energy Division at The Energy and Resources Institute (TERI) noted that the mandate for 20% localization under the VGF scheme is a signal of intent to start localization with non-cell components where India is faster, while cells can be accelerated under the ongoing Incentive Scheme for Advanced Chemical Cells Manufacturing.
