The India Energy Storage Alliance (IESA), along with leading industry experts, has welcomed the Union Budget 2026-27's significant push for energy storage and battery manufacturing, including the ₹40,000 crore ECMS enhancement, explicit BCD exemptions for BESS, dedicated Rare Earth Corridors across Odisha, Kerala, Andhra Pradesh and Tamil Nadu, ISM 2.0 for semiconductor manufacturing, three Chemical Parks for battery chemicals, and deployment of 4,000 electric buses in the Northeast.

However, the Alliance has raised concerns over critical gaps, including the absence of allocations for lithium and nickel refining under the recently announced scheme, missing incentives for the recycling industry, and the lack of GST reduction on water electrolysers from 18% to 5%. IESA has submitted targeted policy recommendations to the government to accelerate India’s clean energy goals.

Highlighting the need for swift implementation and clear operational frameworks, Debmalya Sen, President, India Energy Storage Alliance (IESA), said, "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."

IESA has also noted that the ₹600 crore earmarked for the National Green Hydrogen Mission, triple the revised budget estimate for 2025-26, indicates an expected extension of the PLI electrolyser manufacturing deadline, while operational support mechanisms and sector-specific skilling initiatives remain inadequately addressed.

Vinayak Walimbe, Managing Director, Customised Energy Solutions, said, "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."

Reflecting on the budget's implications for solar energy and domestic manufacturing, Dr Avishek Kumar, Founder, Sunkonnect and Global Climate Tech Entrepreneur, emphasised, "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."

Commenting on the budget's strategic alignment with India's energy transition goals, Gaurav Aggarwal, Co-Founder, 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."

Emphasising the critical role of battery recycling in building a circular economy, Akhilesh Bagaria, Co-Founder, NavPrakriti, said, "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 the Budget could be further strengthened with extended PLI schemes for advanced battery chemistries, green hydrogen infrastructure, and GST rationalisation for battery recycling, it marks a transformative moment for India's clean energy ecosystem.