India is undergoing a significant energy transition. The focus is no longer limited to expanding renewable capacity; it now includes developing new solutions for deep decarbonisation. After rapid progress in solar and wind power, attention has shifted to green hydrogen, which is becoming a key pillar of India’s clean energy strategy.
India has set a Net Zero target for 2070 and committed to building 500 GW of non-fossil fuel-based capacity by 2030. In this context, green hydrogen is emerging as a carbon-free alternative for hard-to-abate industrial sectors such as steel, refining and fertilisers.
What’s Happening?
Green hydrogen is produced by splitting water into hydrogen and oxygen using electrolysers powered by renewable energy. Because the process uses clean electricity, it results in minimal carbon emissions, making it a viable clean fuel option.
The National Green Hydrogen Mission aims to establish a production capacity of 5 million metric tonnes (MMT) per annum by 2030. The government estimates that the mission could attract over Rs 8 lakh crore in investment and generate more than 6 lakh jobs.
In a recent development, India recorded its lowest-ever discovered price in a green hydrogen tender at around Rs 279 per kilogram. This signals a steady decline in costs as technology improves and scale increases.
Policy Support
India launched the National Green Hydrogen Mission in 2023 with a target of producing 5 million tonnes annually by 2030. A budgetary outlay of Rs 19,744 crore (approximately US$ 2.2 billion) has been allocated for the mission under the Ministry of New and Renewable Energy. The broader objective is not only to scale up domestic production but also to position India as a competitive global player in green hydrogen.
A central component of the mission is the SIGHT (Strategic Interventions for Green Hydrogen Transition) scheme. Under this framework, incentives worth up to Rs 17,490 crore (approximately US$ 1.94 billion) are being extended to support electrolyser manufacturing and green hydrogen production. Several large corporate groups, including Reliance, Adani, L&T and Jindal, have participated in the scheme and are setting up electrolyser manufacturing facilities and integrated projects. This suggests that implementation is moving beyond policy announcements to on-ground execution.
By 2025, projects had been awarded for 3,000 MW per annum of electrolyser manufacturing capacity, 8.62 lakh tonnes of annual green hydrogen production, and 7.24 lakh tonnes of green ammonia output. These milestones indicate measurable progress in building the ecosystem required for long-term growth.
What Does This Mean for Investors?
The green hydrogen value chain offers opportunities across multiple segments. Capital expenditure is expected to rise in electrolyser manufacturing, renewable power generation, green ammonia facilities, storage infrastructure and port logistics.
The projected investment of over Rs 8 lakh crore and the potential creation of 6 lakh jobs underscore the scale of the opportunity. With tender prices declining to around Rs 279 per kilogram, improving cost efficiencies could support better operating economics over time.
From a long-term perspective, the sector may appeal to investors aligned with themes such as climate transition and energy security. At the same time, it is important to track technological advancements, cost trajectories and the pace of policy implementation.
What’s Next?
A production target of 5 MMT, along with plans to add 125 GW of additional renewable capacity by 2030, could significantly reshape India’s energy landscape. If production costs become globally competitive, India may emerge as a key supplier to markets in Asia and Europe.
Green hydrogen has the potential to enable decarbonisation in sectors such as steel, cement and heavy transport, supporting progress towards the Net Zero goal.
Over the coming years, technological innovation, economies of scale and international partnerships will play a decisive role in shaping the sector. If policy support remains consistent and capital continues to flow, green hydrogen could become a defining chapter in India’s clean energy transition.
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
