India's Green Hydrogen ecosystem: August 2025 Strategic opportunities, key challenges, and demand potential
India is uniquely positioned to become a global leader in the production, utilization, and export of Green Hydrogen, leveraging its abundant renewable energy resources, policy momentum, and rapidly growing domestic demand. The National Green Hydrogen Mission (NGHM), launched in January 2023 with an outlay of INR19,744 crore (US$2.4 billion), aims to establish an annual Green Hydrogen production capacity of 5 million metric tons (MMT) by 2030. This initiative is expected to mobilize investments exceeding INR8 lakh crore (US$91.95 billion), create half a million jobs, and reduce fossil fuel imports by INR1 lakh crore (US$11.49 billion) annually, while abating 50 MMT of CO₂ emissions.
India’s strategic advantages include some of the lowest renewable electricity costs globally, high solar irradiance, and a robust transmission infrastructure. These factors are expected to drive down the levelized cost of Green Hydrogen to INR260-310/kg (US$3–3.7/kg) by 2030. With the global hydrogen market projected to grow from US$8.8 billion in 2024 to US$199 billion by 2034, India is targeting significant export opportunities, especially to the EU, Japan, and South Korea.
Key sectors identified for Green Hydrogen deployment include steel, fertilizers, refineries, transportation, and energy storage. Notably, the steel sector could drive demand up to 30 MMT by 2050, while refinery and fertilizer sectors are actively exploring substitution of Grey Hydrogen with green alternatives. Pilot projects under NGHM are already underway in steel, mobility, and maritime sectors, complemented by incentives for electrolyzer manufacturing and Green Hydrogen production through the Strategic Interventions for Green Hydrogen Transition (SIGHT) program.
Despite these opportunities, several challenges remain. These include high capital costs, limited infrastructure for storage and transportation, technology dependencies for critical electrolyzer components, water resource constraints in renewable-rich regions, and the absence of harmonized international standards. Moreover, cost competitiveness against grey hydrogen remains a barrier, requiring further reduction in renewable electricity and electrolyzer costs.