India’s Battery Energy Storage System (BESS) sector is projected to register a Compound Annual Growth Rate (CAGR) of 91 per cent between the financial years 2026 and 2032. According to a Nuvama report, battery storage will play a pivotal role in integrating renewable energy into the grid, balancing power supply, and meeting round-the-clock electricity demands.
The report indicates that the country’s total BESS capacity could rise from 6.3 GWh in FY2026 to 302 GWh by FY2032. During this period, annual capacity additions are expected to grow from 5.7 GWh to 56 GWh. Estimates by the Central Electricity Authority (CEA) suggest that BESS demand in India could reach 236 GWh by 2032 and 1,840 GWh by 2047.
Nuvama noted that imports currently meet approximately 89 per cent of existing requirements. Declining battery costs and potential policy frameworks, such as the ALMM (Approved List of Models and Manufacturers), could accelerate domestic production, localisation, and the adoption of this technology. Lithium-ion technology currently holds a market share of around 98 per cent in the BESS sector. The report also identifies sodium-ion technology and the ‘China+1’ strategy as opportunities for India.
In terms of manufacturing economics, the commercial, industrial, and retail segments are projected to yield a spread of $18–$23 per kWh and an EBITDA margin of 17–20 per cent. Meanwhile, the utility segment is expected to see a spread of $8 per kWh and an EBITDA margin of 9 per cent. Despite the narrower spread, the report estimates that investment costs in this segment could be recovered within one to two years. The report states that the Internal Rate of Return (IRR) for an integrated BESS facility could be around 12 per cent. Domestic production stands to benefit from a capital expenditure of $80 million per GWh, Production-Linked Incentive (PLI) support amounting to ₹181 billion for a 50 GWh capacity, and competitive labour costs. Meanwhile, the IRR for a cell-to-pack configuration is estimated to be around 31 per cent.
Earnings from BESS are also likely to rise at the company level. According to the report, BESS-related business could contribute between 17 and 60 per cent to companies’ revenues by the 2028 fiscal year.
Nuvama believes that policy support, local manufacturing, and large-scale capacity expansion could transform the BESS sector in India into an opportunity for export-led growth. As capacity grows, this sector could become a key driver for improved corporate earnings and a re-rating of valuations.
