A hydrogen bet to reshape economy

India’s clean energy transition has entered a decisive phase. With the goal of becoming a developed nation by 2047 and achieving net zero emissions by 2070, the country must gradually replace fossil fuels with scalable, domestic alternatives. Green hydrogen has emerged as one of the most promising tools to decarbonise core industries, enhance energy security and open new global markets. It is not merely a technology shift but a strategic economic pathway that integrates sustainability with industrial competitiveness.

Launched in 2023, the National Green Hydrogen Mission (NGHM) sets a target of five million metric tonnes of green hydrogen production per year by 2030. The Mission aims to attract investment of over `8 lakh crore, create more than six lakh jobs and cut fossil fuel imports by at least `1 lakh crore. These numbers indicate that hydrogen is no longer experimental but central to India’s economic vision.

As of May 2025, nineteen companies have received allocations for producing about 8.62 lakh tonnes of green hydrogen annually. Additionally, fifteen firms have been awarded 3,000 MW per year of electrolyser manufacturing capacity. This demonstrates that the ecosystem is shifting from pilot announcements to physical infrastructure.

The Mission has a total outlay of `19,744 crore up to FY 2029–30. Of this, `17,490 crore has been earmarked for the Strategic Interventions for Green Hydrogen Transition programme, which incentivises domestic manufacturing. Another `1,466 crore supports pilot projects, `400 crore funds research and development and `388 crore covers enabling components such as standards, infrastructure and skills.

Hydrogen qualifies as green only when produced using renewable energy and within strict emissions limits. India has set a threshold of not more than two kilograms of CO2 equivalent per kilogram of hydrogen produced, including through biomass conversion. In 2025, the government launched the Green Hydrogen Certification Scheme to ensure traceability and credibility. Certification is mandatory for any plant that seeks incentives or sells hydrogen in domestic market. The Bureau of Energy Efficiency serves as the nodal authority that accredits laboratories assessing production emissions.

The Mission has prioritised sector-wise applications rather than a broad generic approach. In steelmaking, five pilots are testing hydrogen-based iron reduction under Indian operating conditions. In fertilisers, a long-term auction for green ammonia discovered a price of `55.75 per kilogram. That figure applies to the first auction, but subsequent rounds have seen slightly lower bids, suggesting that costs may fall further as scale improves.

In road transport, 37 hydrogen buses and trucks will operate across ten routes with nine refuelling stations. Government support amounts to around `208 crore. The highest-altitude hydrogen mobility facility in the world—located in Leh—is already in operation. It includes five buses and is estimated to mitigate around 350 tonnes of carbon dioxide annually while producing pure oxygen equivalent to planting over 13,000 trees.

Shipping is an early mover. At V O Chidambaranar Port in Tamil Nadu, a hydrogen facility producing 10 Nm³ per hour was commissioned in September 2025 for uses such as street lighting and EV charging. While the full programme at the port is valued at around `25 crore, independent releases indicate that the electrolyser itself cost approximately `3.87 crore. At Deendayal Port in Kandla, a megawatt-scale plant with an estimated cost of `13 crore has begun producing about 140 tonnes per year. Plans are also advancing for a 750 cubic metre methanol bunkering and refuelling facility, part of a proposed coastal green shipping corridor between Kandla and Tuticorin.

Technological capability will determine whether India remains a buyer of hydrogen technologies or becomes a supplier. Under the Strategic Hydrogen Innovation Partnership, public and private institutions are collaborating on research across safety systems, storage, electrolyser design and high-altitude performance. More than 23 research projects have been awarded support, and over 5,600 professionals have already received training under hydrogen-related skill programmes. Without a specialised workforce, capital investment cannot translate into operational capability; the Mission has recognised this early.

India has also taken its place in the evolving global hydrogen community. Its first pavilion at the World Hydrogen Summit in Rotterdam in 2024 marked a shift from domestic readiness to international positioning. Partnerships are now active with the European Union, the United Kingdom, Germany’s H2Global and Singapore. These cover standards, tenders, research and coordinated infrastructure development. They will matter not just for technology exchange but for building export-ready value chains.

The ambition is clear, yet several challenges must be resolved. First, hydrogen storage and transportation infrastructure remains limited. Unless a clear regulatory and pricing framework is established, early producers may struggle to connect with buyers. Second, financing models must adapt. Hydrogen projects require blended capital and longer horizons; traditional lending models are unlikely to support them at scale. Third, states will need to align policies, standards and land use norms to avoid regulatory fragmentation.

A related priority is affordability. Green hydrogen cannot compete with fossil-based hydrogen or natural gas unless costs fall through scale, and demand aggregation. Some experts advocate a carbon pricing mechanism, others suggest phased mandates for specific industries. Both approaches need calibration to balance cost, competitiveness and climate responsibility.

India currently imports over 85 per cent of its crude oil and roughly half of its natural gas. Deploying domestic green hydrogen to replace even a small fraction of this demand would strengthen strategic autonomy and protect against external price shocks. Beyond energy security, hydrogen offers an opening to build a new industrial chain—from electrolyser manufacturing to storage tanks, fuel cells, process engineering, safety systems and shipping capabilities.

The NGHM has aligned policy, pilot projects and incentives with an unusually high degree of coordination. The next phase must convert pilots into markets. International partnerships should move from memoranda to commercial deals. Green hydrogen is no longer a future technology. It is a contemporary economic strategy. India is in a rare position, with competitive solar and wind power, a growing manufacturing base and a government willing to invest systematically in clean infrastructure. 

The author is an energy policy analyst. He writes on issues related to industrial strategy, and the geopolitics of resource security