Battery Energy Storage System (BESS) Approval Framework in India

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Dated: 17.02.2026

Battery Energy Storage System (BESS) Approval Framework in India

As of early 2026, India’s regulatory approach to Battery Energy Storage Systems (BESS) is strongly geared towards encouraging domestic manufacturing and rapidly expanding grid-scale storage capacity. The Ministry of Power (MoP) has introduced important relaxations to ease project participation, while the Union Budget 2026–27 has provided significant fiscal incentives to accelerate investment in the sector.

1. DPIIT and Public Procurement Compliance

Although recognition under Startup India offers general benefits, BESS projects are primarily governed by public procurement rules issued under the “Make in India” framework.

Temporary Relaxation (Jan 2026 – Jan 2027)- Due to the limited availability of domestic lithium-ion cell manufacturing, the Ministry of Power has granted a one-year exemption from strict DPIIT registration and localisation requirements. This relaxation applies to bidders using lithium-ion cell technology under Transfer-of-Technology (ToT) arrangements, even where the technology partner is from a land-border-sharing country.

Standard Compliance Route- Projects not covered by this temporary exemption must comply fully with the Public Procurement (Preference to Make in India) Orders. This includes mandatory DPIIT registration for vendors from land-border countries and adherence to local content norms.

BIS Certification Requirement– All BESS battery packs must undergo testing at BIS-recognised laboratories and obtain BIS Compulsory Registration Scheme (CRS) approval under IS 16270:2023.

2. Documentation Required for Approval

Approval of BESS projects requires submission of detailed technical, manufacturing, and regulatory documentation, including:

Technical Documentation

Detailed system design and schematics
Safety and protection documentation
Battery Management System (BMS) architecture and specifications

Manufacturing Information

Factory layout and production workflow
Quality Assurance and Quality Control procedures

Mandatory Certifications

ISO 9001:2015 certification

Testing Requirements

Test reports issued by BIS-approved laboratories

Additional Declarations

Transfer-of-Technology agreement (for projects using the 2026 exemption)
Self-declaration of local content percentage

3. Fiscal Incentives and Policy Support (Budget 2026–27)

The Union Budget and related policy measures provide multiple incentives to reduce project costs and improve viability.

Customs Duty Relief

Basic Customs Duty removed on specified capital goods used for lithium-ion cell manufacturing, as covered under Serial No 101A of Customs Notification no 02/2026-Customs, Dated 01-02-2026.
0% BCD on sodium antimonate used in solar glass for BESS applications, as covered under Serial No 101 of Customs Notification no 02/2026-Customs, Dated 01-02-2026.

Customs NotificationDownload

Transmission Charge Waiver

Full waiver of Inter-State Transmission System (ISTS) charges for BESS projects commissioned on or before 30 June 2028, provided they are co-located with renewable energy projects

Viability Gap Funding (VGF)

Central scheme support of 30% of project cost or ₹27 lakh per MWh, whichever is lower

Startup Tax Incentives

Eligible startups may claim income-tax exemption for three consecutive years within the first ten years of operation

4. Mandatory Compliance Requirements

Certain requirements remain non-negotiable for all BESS projects:

BIS Registration

BIS CRS registration is compulsory for storage battery systems

Local Content Requirement

VGF-supported projects must maintain minimum 20% local content, including indigenous Energy Management System (EMS) software

Prohibition on Refurbished Cells

Use of refurbished or second-life battery cells is strictly prohibited

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: Ministry of Power

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