The upcoming budget must prioritize in-house technology and equipment development, provide clarity on delayed power purchase agreements (PPAs) and power sale agreements (PSAs), increase budgetary allocation and policy support for Green Energy Corridors, introduce production-linked incentives for battery energy storage system (BESS) manufacturing, establish an Approved List of BESS Integrators (ALBI), lower the cost of capital through priority sector lending, extend ALMM for solar cells, and continue the ISTS waiver, among other measures.
Surendra K Gupta, Executive Director and CFO, AMPIN Energy Transition
AMPIN Energy Transition
The upcoming budget must prioritize in-house technology and equipment development, provide clarity on delayed power purchase agreements (PPAs) and power sale agreements (PSAs), increase budgetary allocation and policy support for Green Energy Corridors, introduce production-linked incentives for battery energy storage system (BESS) manufacturing, establish an Approved List of BESS Integrators (ALBI), lower the cost of capital through priority sector lending, extend ALMM for solar cells, and continue the ISTS waiver, among other measures.
The government should place strong emphasis on in-house development of cutting-edge solar technologies, enabling India to achieve self-reliance in a shorter timeframe and indigenize next-generation technologies.
In addition to this critical, solar, cell & module manufacturing equipment should be brought und er the PLI framework. This support may subsequently be extended in a phased and structured manner to wafer and ingot manufacturing equipment. India already possesses strong equipment manufacturing capabilities across multiple industrial sectors. Leveraging these capabilities, coupled with indigenous technology development, can rapidly position India as a globally competitive and self-reliant solar manufacturing hub.
As of January 2026, over 45 GW of renewable energy capacity in India is facing large delays in signing Power Purchase Agreements (PPAs) and Power Sale Agreements (PSAs), with developers. This uncertainty has raised serious concerns among investors and lenders. The industry requests the government to provide clear confirmation in the budget that these PPAs and PSAs will be signed expeditiously. Such assurance will significantly improve sectoral sentiments and catalyse increased inflows of both equity and debt into India’s renewable energy sector.
The industry appreciates the increased budgetary allocation and policy focus on Green Energy Corridors. Continued emphasis with higher allocations and faster execution is critical to ensure timely grid connectivity for upcoming renewable capacity.
Additionally, procedures and guidelines at the state level for grid connectivity and charging infrastructure should be further streamlined to ensure faster approvals, seamless evacuation, and immediate power injection upon physical commissioning of projects.
“Solar and BESS Manufacturing” to be re-categorized into “Infrastructure” category of RBI for ease of financing and re-financing. A dedicated PLI scheme for BESS manufacturing—similar to solar—should be introduced, encouraging local integration of components such as Containers, HVAC systems, Cabling, Fire-fighting systems. Only Lithium-ion cells, which are currently not manufactured at scale in India, should be permitted for import under this scheme.
An Approved List of BESS Integrators, on the lines of ALMM for solar modules, should be introduced. This will ensure grid-connected BESS assets meet quality and safety standards, minimize systemic risks to the electricity grid and Improve investor and lender confidence.
India is estimated to require USD 200+ billion in investments by 2030 to meet its clean energy targets. Access to competitively priced capital will be critical. The industry requests the inclusion of renewable energy projects under Priority Sector Lending and Re-introduction of lower TDS rates on interest for ECBs and Rupee-denominated bonds. These measures will materially reduce financing costs and accelerate project deployment.
Considering manufacturing of solar cells in the country is still picking up and with an increasing demand for Solar cells &supply demand mismatch, government should consider exceeding its target to introduce ALCM for cells for a further period of 2 years.
Interstate charges on power transmission through ISTS connectivity are waived till 2025. This should be further extended over the next 5 years to give a steeper boost to C&I segment which has large ISTS opportunities.
The concessional 15% income tax rate for new manufacturing entities in the renewable energy sector should be reintroduced in Budget 2026 and to be extended for a minimum of five years.
Renewable energy companies should be excluded from deemed dividend tax provisions in cases where loans or advances are provided by SPVs to shareholders. This will enable optimal capital utilization within project groups.
Lower GST on BESS and related products from existing18% to 5%. BESS enables grid stability and allows more RE to be integrated into the grid. Lower GST will accelerate adoption, encourage domestic manufacturing, support job creation, exports, and emissions reduction.
Exemption of GST on Corporate Guarantee for renewable energy companies wherein Corporate Guarantee is provided by Holding Company to lenders in respect of funding obtained by SPVs.
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