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The Union Budget has received a positive response from the India Energy Storage Alliance and industry experts for measures supporting electronics manufacturing, battery storage and clean energy. Key announcements include an INR 40,000 crore push for electronics components, customs duty exemptions for battery energy storage systems, chemical parks and rare earth corridors. However, the industry has flagged missing support for lithium and nickel refining and battery recycling. While the higher capital expenditure and solar incentives improve investment visibility, experts say gaps in the battery value chain and cost challenges still need policy attention.
Industry body India Energy Storage Alliance (IESA), along with several energy and clean-tech experts, has welcomed the Union Budget's focus on electronics manufacturing and energy storage, stating that the INR 40,000 crore outlay for duty exemptions on electronics components is expected to support the growth of battery storage in the country. The measures come at a time when India is working towards its target of 500 GW of renewable energy capacity by 2030, a goal that will require large-scale deployment of battery energy storage systems to manage grid stability. Advertisement
IESA said the Budget shows intent to strengthen domestic energy storage and battery manufacturing through multiple initiatives. These include the enhancement of the INR 40,000 crore Electronics Components Manufacturing Scheme, explicit Basic Customs Duty exemptions for battery energy storage systems, plans to develop rare earth corridors across Odisha, Kerala, Andhra Pradesh and Tamil Nadu, the rollout of ISM 2.0 to support semiconductor manufacturing, the setting up of three chemical parks for battery-related chemicals, and the proposed deployment of 4,000 electric buses in the Northeast.
At the same time, the alliance highlighted gaps that could slow down the development of a complete battery ecosystem. It pointed out that the Budget did not provide allocations for lithium and nickel refining under the recently announced schemes, nor did it offer incentives for the battery recycling industry. According to IESA, these areas are critical for reducing import dependence and ensuring long-term supply security for battery materials.
IESA President Debmalya Sen said the government's approach to boosting energy storage and battery manufacturing is comprehensive, but effective execution will be key. He indicated that the alliance has recommended the issuance of detailed operational guidelines for the proposed chemical parks within a defined timeframe, covering land allocation, infrastructure rollout and incentive structures for battery chemical manufacturers. Sen also urged the creation of a dedicated battery energy storage system category under the Infrastructure Risk Guarantee Fund, with risk parameters tailored specifically to the sector.
Industry executives echoed similar views. Customized Energy Solutions Managing Director Vinayak Walimbe said that while the exemption of Basic Customs Duty on capital goods used for advanced chemistry cell manufacturing is a positive move, it does not fully address the value chain. He noted that extending this exemption to equipment used in ACC component manufacturing would be necessary to meaningfully strengthen domestic capabilities.
Clean energy entrepreneurs also highlighted the broader capital expenditure push. Dr Avishek Kumar, Founder of Sunkonnect, said the record INR 12.21 lakh crore capital expenditure allocation and the 29 per cent increase for the PM Surya Ghar scheme provide better visibility for solar investments and scaling up domestic manufacturing. He added that customs duty rationalisation to 20 per cent on solar cells and modules, along with the Basic Customs Duty exemption on sodium antimonate used in solar glass, will support local production. However, he cautioned that while these steps help manage domestic output, they may not lead to a sharp reduction in costs, and further measures would be needed to improve affordability.
Other players in the energy storage space also welcomed the policy direction. GoodEnough Energy Co-Founder Gaurav Aggarwal said the Budget sends a strong signal in favour of battery energy storage and domestic manufacturing ambitions. NavPrakriti Co-Founder Akhilesh Bagaria said the full customs duty exemption on waste and scrap of lithium-ion batteries addresses a key challenge related to the availability of recycling feedstock, which is essential for building a circular battery economy.
Source PTI
FAQ
Q1. How has the industry responded to the Union Budget's focus on electronics manufacturing and energy storage?
Industry bodies and clean-tech experts have largely welcomed the Union Budget, describing it as supportive of India's electronics manufacturing and energy storage ambitions. The India Energy Storage Alliance (IESA) said the INR 40,000 crore push for electronics components and related duty exemptions sends a clear signal of intent to strengthen domestic manufacturing. These measures are seen as timely, especially as India works towards its 500 GW renewable energy target by 2030, which will require significant battery storage capacity to ensure grid stability.
Q2. What specific measures in the Budget support battery storage and clean energy development?
The Budget includes several measures aimed at strengthening the energy storage ecosystem. These include enhancements to the Electronics Components Manufacturing Scheme, Basic Customs Duty exemptions for battery energy storage systems, and the rollout of ISM 2.0 to support semiconductor manufacturing. Plans to develop rare earth corridors in states such as Odisha, Kerala, Andhra Pradesh and Tamil Nadu, along with the establishment of three chemical parks for battery-related chemicals, are expected to support upstream and midstream segments of the battery supply chain.
Q3. Why are these measures important for India's renewable energy goals?
Large-scale battery energy storage systems are critical for managing the intermittency of renewable energy sources such as solar and wind. Industry experts noted that as renewable capacity expands, storage solutions will be essential to balance supply and demand and maintain grid reliability. By supporting electronics, batteries and related infrastructure, the Budget improves investment visibility and encourages private participation in sectors that are central to India's clean energy transition.
Q4. What gaps has the industry highlighted in the current Budget proposals?
Despite welcoming the overall direction, industry stakeholders have pointed out gaps in the battery value chain. IESA noted that the Budget does not include targeted support for lithium and nickel refining under existing schemes, nor does it provide dedicated incentives for battery recycling. These segments are considered critical for reducing import dependence, improving supply security and building a resilient, end-to-end domestic battery ecosystem over the long term.
Q5. What additional steps have industry leaders recommended to address these gaps?
Industry representatives have called for clearer operational guidelines for the proposed chemical parks, including timelines for land allocation, infrastructure development and incentive structures. IESA has also suggested creating a dedicated battery energy storage category under the Infrastructure Risk Guarantee Fund, with sector-specific risk parameters. Experts believe such measures would help de-risk investments and accelerate capacity creation across the battery value chain.
Q6. How do clean energy companies view the broader capital expenditure and solar-related announcements?
Clean energy entrepreneurs have welcomed the record INR 12.21 lakh crore capital expenditure allocation and the increased funding for the PM Surya Ghar scheme, noting that these improve long-term investment visibility. Customs duty rationalisation for solar cells and modules, along with exemptions on key inputs like sodium antimonate used in solar glass, are expected to support domestic manufacturing. However, some experts cautioned that while these steps strengthen production, further policy support may be needed to significantly lower costs and improve affordability.
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