India’s energy storage market surges in 2025 on BESS tender boom

• Energy storage tendering rises 1.4 times compared to CY’24
• Execution lags despite rapid growth in tendering activity

India’s battery energy storage sector experienced a sharp acceleration in 2025, driven by a surge in utility-scale battery energy storage system (BESS) tender activity, policy support and expanding participation from new developers, according to the India Energy Storage Market Report 2025.

The report shows that energy storage tendering reached 102 gigawatt-hours (GWh) in 2025 – roughly 1.4 times the volume seen in 2024 – with standalone BESS tenders accounting for the majority of this activity. BESS issuance alone climbed to 60 GWh, up sharply from 24 GWh in 2024 and just 4 GWh in 2023.

Cumulatively since 2018, India has issued 155 energy storage system (ESS) tenders totalling 224 GWh, underlining the rapid maturation of what was a nascent market just a few years ago. By end 2025, operational BESS capacity remained small at around 0.7 GWh, but project pipelines suggest this will expand substantially in the near term.

Policy incentives played a crucial role. The report highlights continued support through viability gap funding (VGF) allocations — including funding for up to 30 GWh of standalone BESS – and extensions of inter-state transmission system (ISTS) waivers till 2028. Additionally, recent regulatory updates, such as the Electricity Amendment Rules 2025, formally recognise ESS as a distinct asset class, improving investor confidence.

Despite strong tendering activity, only about 28.6 GWh had been awarded and roughly 5.7 GWh was under execution by the end of 2025. This has created a large development pipeline that is expected to translate into substantial capacity additions over the next 18-24 months.

Looking ahead, the report projects total ESS capacity in India could rise to 336 GWh by 2029-30 and exceed 400 GWh by 2031-32, supported by an estimated INR 4.79 trillion in investment.

The 2025 BESS tender boom reflects how India’s energy transition is shifting from early-stage exploration to meaningful grid integration of storage. Falling battery costs, policy clarity and expanding market participation are positioning energy storage as a central tool for managing renewable variability and strengthening grid reliability as the country scales wind and solar deployment in the coming decade.