On 08 October 2025, the Union Cabinet, led by Prime Minister Narendra Modi, approved a viability gap funding (VGF) scheme worth Rs 3,499 crore to support the development of battery energy storage systems (BESS) across India, targeting a total capacity of 4,000 megawatt-hours (MWh).

This marks the first government-backed initiative to financially assist the battery storage sector, aiming to bridge the financial viability gap for developers and enable competitive pricing for distribution companies. The scheme’s funding will be disbursed in two phases over five and seven years, linked to project progress and performance.

By encouraging large-scale energy storage, the government intends to improve grid stability, better integrate intermittent renewable sources like solar and wind, and meet peak electricity demand efficiently. The initiative is expected to boost domestic investment and manufacturing in the battery storage ecosystem, facilitating greater use of renewable energy and ensuring more reliable, sustainable power for consumers nationwide.