India reviews MOOWR scheme use in battery storage imports amid industry concerns

Summary

• Policy review: Department of Revenue India is examining the use of the MOOWR scheme in battery energy storage projects.
• Industry concerns: Groups such as India Energy Storage Alliance have raised issues about duty deferment impacting competitive bidding.
• Consultations underway: Discussions with stakeholders, including the power sector, are expected as part of the review process.

NEW DELHI, April 20, 2026 — The Indian government is reviewing the application of the Manufacture and Other Operations in Warehouse Regulations (MOOWR) scheme in battery energy storage system (BESS) projects, following industry representations on its impact on renewable energy auctions.

Officials from the Department of Revenue India are examining whether the scheme’s duty deferment provisions are being used in ways that could influence tariff competitiveness in solar-plus-storage bids.

Focus on duty deferment framework

The MOOWR scheme allows companies to import goods into bonded warehouses with deferred payment of customs duties, subject to compliance with prescribed conditions.

While the scheme is intended to support manufacturing and value addition, there is no official confirmation that it is being “misused” or that specific duty percentages are being systematically bypassed in battery storage projects.

Industry stakeholders have, however, highlighted that the timing of duty payments under MOOWR could affect project cost structures.

Industry raises concerns

The India Energy Storage Alliance and other groups have submitted representations to policymakers, flagging concerns about a level playing field in competitive bidding.

These concerns relate to whether developers using duty deferment mechanisms may have cost advantages compared to those following standard import procedures.

However, claims regarding specific tariff distortions or quantified advantages are not officially established and vary across projects.

Policy alignment under review

The government has previously refined import policies in sectors such as solar manufacturing to align incentives with domestic production goals.

Any potential changes to MOOWR usage in BESS would likely aim to ensure consistency with broader initiatives such as local manufacturing promotion and energy transition targets.

No final decision or timeline for policy changes has been officially announced.

Growing role of energy storage

Battery energy storage systems are becoming increasingly important in India’s renewable energy mix, supporting grid stability and round-the-clock power supply.

Industry estimates indicate strong growth potential for storage deployment, though specific projections on capacity expansion vary and are not standardized across sources.

Why this matters

• Level playing field: Policy clarity is important for fair competition in renewable energy auctions
• Domestic manufacturing: Aligning incentives can support local battery production
• Tariff transparency: Consistent cost structures help improve price discovery in bids
• Energy transition: Storage is critical for integrating renewable energy into the grid

FAQs

Q1. What is the MOOWR scheme?

It is a regulatory framework that allows duty deferment on imported goods stored in bonded warehouses for manufacturing or other permitted operations.

Q2. Is the scheme being misused?

There is no official finding of misuse. The government is currently reviewing industry feedback.

Q3. Will this affect renewable energy projects?

Any policy change could impact cost structures, but no confirmed changes have been announced yet.