India’s battery energy storage system requirement to rise nearly seven-fold to 236 GWh by FY2031-32: Rubix Data Sciences

India’s battery energy storage system (BESS) requirement is projected to rise nearly seven-fold, from 34.72 GWh in FY2026-27 to 236.22 GWh by FY2031-32, as growing renewable energy penetration and electricity demand drive the need for flexible, dispatchable power—according to Rubix Data Sciences’ latest report on the BESS industry.

The report, based on estimates by the National Electricity Plan 2022-32, also says that the investment requirement to meet this demand could reach INR 3.49 trillion by FY 2031-32.

BESS deployment has accelerated sharply in 2026. As per sources cited in the report, India added 8.2 GWh of new BESS capacity between January and June 2026, compared to less than 100 MWh in the same period of 2025. As of August 2026, 9.08 GWh of BESS capacity was operational, 79.92 GWh under construction, 24.13 GWh awarded and 63.53 GWh under tendering, taking the total across these stages to 176.66 GWh, which is about 75% of the FY2031-32 requirement.

BESS is expected to account for a growing share of India’s energy storage needs. Its share of the required storage power capacity is projected to rise from around 54% in FY2026-27 to 64% by FY2031-32, while its share of total energy storage requirements is expected to increase from approximately 42% to 57%. Over the same period, India’s overall energy storage requirement is projected to rise from 82.37 GWh to 411.4 GWh.

Installed capacity remains geographically concentrated. Gujarat and Rajasthan together account for nearly 88% of India’s installed utility-scale BESS capacity, with shares of 44.0% and 43.7% respectively, followed by Maharashtra at 5.1%. This reflects the two states’ strong renewable energy base and the growing need for storage to support renewable integration and grid flexibility.

Rising electricity demand and rapid renewable expansion are expected to remain key drivers of BESS adoption. Peak demand is projected to increase from 289 GW in FY2026-27 to 459 GW by FY2035-36, while annual electrical energy requirements are expected to rise from 1,929 BU to 3,365 BU. India also added approximately 29 GW of solar and wind capacity in H1 2026, increasing the need for storage to manage variable renewable generation and balance supply and demand.

Policy support is strengthening as well. The Energy Storage Obligation is scheduled to rise from 1% in FY2023-24 to 4% by FY2029-30, and a proposed mandate for new solar and onshore wind projects could require storage equivalent to at least 10% of project capacity for two hours from July 2027. VGF currently covers about 43.2 GWh of targeted capacity, and the Inter-State Transmission System (ISTS) waiver applies to co-located projects commissioned by June 30, 2028. Under the Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) batteries, 40 GWh of the 50 GWh ACC target has been awarded to four firms, with 10 GWh earmarked in July 2026 for grid-scale storage.

However, the industry continues to face challenges, including high dependence on imports for lithium-ion batteries, aggressive tariff bidding, financing and execution constraints, and grid connectivity bottlenecks. Imports of lithium-ion batteries and accumulators rose from USD 3.0 billion in FY2025 to USD 4.7 billion in FY2026, with China accounting for around 84% of FY2026 imports. Meanwhile, the lowest tariff for a two-hour BESS system fell to INR 1.48 lakh/MW/month in 2025, and nearly 75% of allocated two-hour BESS capacity is classified as “at risk,” underscoring pressure on project economics.

India’s energy transition is entering a phase where storage has become central to grid stability. The pipeline looks large at 176.66 GWh, but only 9.08 GWh is operational today against a requirement of 34.72 GWh this year. What matters now is conversion. 28 GW was tendered in the first half of 2026 and only 9 GW was auctioned. Until more of those tenders turn into built projects, the headline numbers will run ahead of capacity on the grid–Tushar Bhaskar, President, Rubix Data Sciences

The report notes that India’s BESS market offers significant long-term growth and investment opportunities, supported by rising storage requirements, domestic battery manufacturing, policy support and a substantial project pipeline. The recently approved PM-DHARA scheme, which includes a dedicated allocation of INR 500 billion for deploying 50 GWh of BESS by FY2032-33, could further support the sector’s expansion.