First, to avoid confusion, there is no ignition system on a modern diesel engine, but there IS a key switch.
The red “battery light indicator” is actually a diagnostic tool that tells you that there is excitation current going to the alternator field circuit. You cab verify this with an alternator schematic. This light will be on as long as your key switch is on. You should also have an ammeter or voltmeter to measure alternator performance. If you just have a charge indicator light, it will be on when the key switch is on but the engine not running. It will go out as engine speed increases and may come back on dimly when the engine idles.