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MoP Grants Temporary Relief to ToT-Based Bidders in Grid-Scale BESS Tenders

The Ministry of Power (MoP) has announced a temporary relaxation of the Department for Promotion of Industry and Internal Trade (DPIIT) registration requirement for bidders deploying lithium-ion cell technology under transfer-of-technology (ToT) arrangements with countries that share land borders with India. The move enables such bidders to participate in tenders for grid-connected battery energy storage system (BESS) projects.

The waiver will remain in force for one year from January 9, 2026. According to the MoP, the decision has been taken due to the limited availability of domestically manufactured lithium-ion cells, which continues to constrain large-scale BESS deployment in India.

The ministry acknowledged that grid-scale battery manufacturing in India is still at an early stage and noted that lithium-ion cells remain the most commercially mature and cost-effective technology for grid-connected energy storage globally.

As per estimates from the Central Electricity Authority, India will require approximately 208 GWh of BESS capacity by FY 2029–30, a sharp increase from the current installed capacity of around 0.5 GWh.

In 2020, the government amended the General Financial Rules (GFR) 2017, introducing restrictions on bidders from countries sharing land borders with India. While these measures remain in place, the current waiver offers a time-bound exemption specifically for BESS tenders involving ToT-based lithium-ion technologies.

The government continues to promote domestic manufacturing of energy storage systems. In 2025, the MoP directed states and procuring agencies to ensure a minimum of 20% domestic content in BESS projects implemented under the viability gap funding (VGF) program, which is supported by the Power System Development Fund (PSDF).

Tendering activity for energy storage has accelerated significantly. During 2025, multiple agencies issued tenders totaling 17 GW/48 GWh of standalone BESS capacity. India also auctioned 19,690 MWh of battery storage in the same year, representing a 447% year-on-year increase.

Tariffs witnessed a sharp decline, with the lowest tariff in 2025 discovered at Rs148,000 ($1,637.45)/MW/month, down 35.6% from Rs230,000 ($2,433.74)/MW/month recorded in 2024.

According to Mercom Research’s India Energy Storage Landscape 1H 2025 Report, the country’s cumulative installed energy storage capacity reached 490 MWh as of June 2025.

Additionally, the government has permitted states to develop standalone BESS projects under the VGF framework, backed by the PSDF, in both two-hour and four-hour configurations. Earlier guidelines had recommended two-hour discharge durations and an average of 1.5 charge-discharge cycles per day.