Energy storage is indispensable for transitioning towards more sustainable energy systems. It supports the effective use and integration of renewables. It is key to unlocking a fully renewable energy future with abundant, clean power, revolutionizing industries, and creating sustainable urban environments. 

Since the Union Budget 2025 is poised to be a defining moment for India’s electric vehicle (EV) and energy storage industries, the nation must keep striving to achieve its goal of 30% EV penetration by 2030. Though significant measures were taken in past budgets, affordability, charging infrastructure, and advanced battery technology still pose some challenges. That’s why industry stakeholders now seek Finance Minister Nirmala Sitharaman to deliver transformative decisions to accelerate India’s electric mobility revolution.

Simplifying Taxes for Affordability

One of the most pressing demands from the energy storage sector is the rationalisation of Goods and Services Tax (GST) rates. In this realm, the India Energy Storage Alliance (IESA) has called for a uniform 5% GST on all battery technologies, including lithium-ion batteries, which are currently taxed at 18%. The organisation also advocates for increased support for domestic manufacturers of battery components like cathodes, anodes, and electrolytes. Industry players also suggested a Production Linked Incentive (PLI) scheme worth ₹9,000 crore to bolster the ‘Make in India’ campaign.

It is expected that addressing the inverted tax on raw materials will ease working capital pressures and encourage sustainable manufacturing. Additionally, performance-linked incentives for battery innovation and indigenous component manufacturing can position India as a global leader in EV technology. 

Boosting Manufacturing and Technology

Battery technology forms the backbone of the EV ecosystem, which stresses the importance of incentivising the development of advanced, long-lasting, and sustainable energy storage solutions.

Industry players opine that the budget must prioritize self-reliance by reducing import dependency and encouraging international collaborations. Moreover, an enhanced FAME II scheme with extended timelines and increased incentives can drive widespread EV adoption across vehicle categories.

To sum up, investments in research and development for advanced battery technologies are equally vital as innovations in the sector will enhance the performance and credibility of EVs. 

Plug-and-Play Facilities for MSMEs

Micro, Small, and Medium Enterprises (MSMEs) are pivotal in the EV supply chain. The government should develop plug-and-play facilities with ready-to-use infrastructure to support their growth. Such facilities would alleviate the financial burdens on smaller businesses and enable them to scale operations swiftly and seamlessly.

Protecting Domestic Manufacturers

As India’s energy storage sector expands, protecting domestic manufacturers from rising international competition is a must, especially from China. To provide a level playing field for indigenous players, stakeholders recommend gradually increasing customs duties on imported components. These protection measures will ensure competitive pricing for Indian companies while ramping up local production capabilities.

A Pivotal Opportunity

The energy storage and EV industries are at a pivotal juncture, with a global shift toward sustainable transportation gaining momentum. According to Tata Consultancy Services’ Future-Ready eMobility Study 2025, 64% of consumers globally will likely choose an EV for their next vehicle purchase. India must seize this opportunity to address challenges and position itself as a leader in the global EV market.

The Union Budget 2025 holds the potential to transform India’s energy storage landscape, bridging gaps in affordability, infrastructure, and technology. By implementing these key measures, the government can catalyse the nation’s transition to a cleaner and greener future.