India's Union Cabinet on Wednesday 4 November approved a ₹14,500 crore viability gap funding (VGF) scheme to support 92 GWh of grid-scale energy storage, Mercom India, ETV Bharat and Upstox reported. Mercom puts the outlay at about US$1.53 billion.
The support will be paid over the financial years 2026-27 to 2030-31, with the new capacity due by 2030-31. According to the government's official statement, the programme would add storage equal to 170% of India's existing grid-scale storage capacity.
What the 92 GWh covers
The target is split into three parts: 60 GWh of pumped hydro storage, 30 GWh of battery energy storage systems and 2 GWh from alternative storage technologies. Total investment in the projects is estimated at around ₹97,600 crore.
Capacity will be allocated through tariff-based competitive bidding. Public and private sector electricity distribution companies will be eligible for VGF support for battery and pumped hydro projects, while projects based on other storage technologies can be implemented by both public and private entities.
"We will implement this scheme in collaboration with state governments, ensuring that it is distributed across the country," Information and Broadcasting Minister Ashwini Vaishnaw said at the Cabinet briefing.
A 40% local content rule
Battery projects will have to meet a minimum domestic content requirement of 40%. The official statement said the requirement "will encourage domestic manufacturing, create opportunities for Indian industry and complement existing supply-side incentives for battery manufacturing."
The scheme is framed as part of the government's Aatmanirbhar Bharat, or self-reliant India, push. At the same meeting, the Cabinet approved a separate ₹2,814 crore capital support scheme for lithium and nickel processing, aimed at reducing India's dependence on imported refined materials for batteries.
Why storage, and why now
The government says the scheme will store surplus electricity from solar and wind for use during the peak summer season or when renewable output falls, helping to keep power available around the clock. It also expects the programme to improve grid stability, reduce import dependence and strengthen long-term energy security.
The official statement put India's grid-scale storage requirement at an estimated 411 GWh by 2031-32. That need sits alongside the national target of 500 GW of renewable energy capacity by 2030, which will push ever larger volumes of daytime solar into the grid. On those figures, the 92 GWh supported by this scheme would cover a little over a fifth of the storage India expects to need.
What it means for solar developers in Asia
For India's solar market, the scheme is a clear signal that firm, dispatchable renewable power is now the priority rather than daytime megawatts alone. Developers can expect more tenders and contracts that pair solar with storage, and pumped hydro will take the largest share of the funded capacity. The 40% local content rule will steer battery orders towards Indian factories, so suppliers elsewhere in Asia will need to watch the bidding rules closely to see how much of the 30 GWh battery segment remains open to imported components.
Source: Mercom India, ETV Bharat and Upstox, citing the Government of India's official statement, 4 November 2026.
