This sector has an unusual dual-anchor structure, and it sits on two different sides of the border. On the demand side, the Government of India — through SECI, the Ministry of Power and the PLI-ACC programme — sets the tender pipeline, the viability-gap funding that makes low-tariff bids financeable, and the localisation timetable directly. On the supply side, a foreign government — China's Ministry of Commerce — effectively sets whether the process technology behind a competitive cell can legally reach an Indian licensee at all. Neither substitutes for the other, and reading either one too generously is the easiest way to misjudge this sector's timeline.
Two Viability Gap Funding schemes, not one, are in force simultaneously: the original September 2023 scheme (₹3,760 crore of budgetary support, its target capacity since scaled from 4 GWh to 13.2 GWh within the same budget as battery costs fell) and a separate, additive June 2025 scheme (₹5,400 crore from the Power System Development Fund, targeting a further 30 GWh). The same June 2025 notification extended the ISTS (inter-state transmission) charge waiver for co-located BESS to June 2028. Layered on top, the ₹18,100 crore PLI-ACC manufacturing scheme has now opened a second tranche — a 10 GWh global tender specifically earmarked for grid-scale stationary storage cells, bids due October 2026 — an explicit acknowledgement that the original scheme's EV-oriented awards have not produced grid-storage-specific capacity on their own.
"China restricted LFP" is not quite what happened. The July 2025 MOFCOM/MOST amendment restricts the export of LFP and LMFP cathode-preparation technology above a stated compaction-density threshold — a licensing requirement on process know-how, not a ban on the underlying chemistry (which has been patent-free since 2022) or on physical cell exports. China continued selling India finished cells in record volumes throughout 2026; what tightened was specifically the transfer of the manufacturing process behind the highest-spec versions of them.
A separate, later measure moved in the opposite direction. In November 2025, China suspended — until 10 November 2026 — a different, not-yet-implemented set of controls covering lithium-ion batteries, graphite anode material and related production equipment, widely read as part of a broader US-China trade de-escalation. A reader who treats the July restriction and the November suspension as the same policy, or assumes the suspension covers cathode technology too, is reading the situation more favourably — or more alarmingly — than the record supports. Both measures are live, independent, and pointing in different directions, and the suspension's own status past 10 November 2026 is explicitly an open question in the sources that reported it.
The practical result, as Amara Raja's own New Energy Business head put it on the company's Q4 FY26 earnings call, is that "sharing of technology and licensing arrangements are being increasingly discouraged by the Chinese government" — a statement corroborated by JSW Group's August 2026 decision to place a ₹40,000 crore, 50 GWh Odisha cell project on hold for lack of an LFP technology partner, and by Reliance's reported January 2026 pause in cell-manufacturing plans after talks with China's Hithium did not produce a licence. Section 9 sets these company-level episodes against Exide's SVOLT licensing deal, signed in March 2022 — well before this tightening began — which has since produced a commissioned 6 GWh plant. The date on which a company signed its technology deal, not just whether it signed one, is turning out to matter a great deal.
