Boasting the world’s fastest-growing major economy, India recognises the importance of scaling domestic green hydrogen, especially when the world’s most populous country has until 2030 to decarbonise 50% of its energy supply and build out 500GW of fossil-fuel–free generating capacity. Longer term, the government is working towards a net-zero goal of 2070.
India has already set the wheels in motion and in April announced green hydrogen certification for the first time. The framework limits associated emissions to under 2kg CO₂e/kg of hydrogen, mandating annual third-party verification and digital traceability. The ambition is to enhance India’s position as a trusted global supplier.
“India is actively aligning its certification regime with the EU’s Renewable Fuels of Non-Biological Origin rules, introducing a lifecycle emissions threshold more stringent than the EU’s 3.38kg benchmark, thereby improving regulatory compatibility for seamless export,” said Deepto Roy, a partner at Indian law firm Shardul Amarchand Mangaldas.
The EU’s Carbon Border Adjustment Mechanism is another motivation. The carbon tariff on emission-intensive industries comes into force next year and will hurt imports unless efforts are made to align closer to low-carbon alternatives.
“Europe, a key target market for Indian green hydrogen exports, has implemented policies like the CBAM and is expected to demand verifiable guarantees of origin for hydrogen and derivatives like ammonia and methanol,” added Abhishek Saxena, co-founding partner at Indian law firm Phoenix Legal. “The certification scheme is, therefore, a prerequisite for India to access and scale in these high-value markets.”
Modi’s decarbonisation drive
Low-carbon certification is far from the only government support for India’s green hydrogen sector. In 2023, the authorities launched the National Green Hydrogen Mission, with the objective of transforming India into a global production and exportation hub for green hydrogen and its derivatives.
“India launched the mission with an outlay of $2.3b [INR197b],” said Danish Sunasra, a research associate at energy consultancy Wood Mackenzie. “[INR22.5b] is dedicated to pilot projects, R&D and other components, while [INR174b] is allocated for the SIGHT programme to support electrolyser manufacturing and green hydrogen production.”
Woodmac estimates the SIGHT programme has so far allocated INR44b to 16 different OEMs with a total manufacturing capacity of 3GW. INR53.95b has also been provided to 16 developer companies to support their green hydrogen production. In the first quarter of 2025, the Indian government awarded green hydrogen projects with a cumulative capacity of 450,000mt/yr to nine companies, according to cleantech consulting firm JMK Research.
“By 2030, India expects to export more than half of its targeted production of 5mt of green hydrogen annually from emerging coastal hubs in Odisha, Andhra Pradesh, Tamil Nadu, Kerala and Gujarat,” said Roy. “Developers like AM Green and ACME have already moved projects to FID and front-end engineering design stages, backed by non-binding offtake term sheets with global players like Uniper, Yara, BASF and RWE.”
Making new friends
As export opportunities open up, India is also trying to forge closer ties with import markets. In late April, the government announced a green maritime corridor with the Port of Rotterdam aimed at boosting closer collaboration with various Indian ports.
“India’s participation in global hydrogen initiatives such as the G20 High-Level Voluntary Principles on Hydrogen, the India-EU Clean Energy and Climate Partnership and bilateral memorandums of understanding with countries like Germany, the Netherlands and Denmark signals a clear intent to become a major supplier to Europe’s decarbonising industrial economy,” noted Roy. “The Green and Digital Hydrogen Corridor with the Netherlands, linking Indian ports like Deendayal (Kandla) to Rotterdam, is central to this vision.”
India’s engagement with Europe on green hydrogen has also deepened through broader institutional frameworks. At the 10th India-EU Energy Panel, both sides outlined a joint roadmap for advancing green hydrogen, focusing on infrastructure development, regulatory cooperation and strengthening supply chains. The third phase of the India-EU Clean Energy and Climate Partnership (2025–28) further reflects this ambition.
India was also the exclusive partner country at the European Hydrogen Week held in Brussels in November 2024, while the EU played a key role in the International Conference on Green Hydrogen hosted in Delhi in September 2024.
“Europe's attractiveness is further underscored by the EU’s REPowerEU plan, which sets a target to import 10mt of renewable hydrogen by 2030,” said Praveen Raju, head of the corporate practice at Indian law firm Spice Route Legal. “India, with its abundant renewable energy potential and expanding hydrogen infrastructure, is well-positioned to support this demand and emerge as a competitive supplier.”
Challenges lie ahead
Despite the high decarbonising potential, India’s green hydrogen sector faces several structural and technological hurdles that could yet impede growth. High capital costs for electrolysers and infrastructure, limited indigenous manufacturing capabilities and the requirement for consistent renewable energy supply hinder current scalability.
“Producing one kilogram of green hydrogen requires nearly nine litres of demineralised water, making water availability a concern, especially in arid regions,” said Roy. “While desalination and wastewater treatment offer solutions, they add further cost and logistical layers. Additionally, transportation and storage remain underdeveloped, particularly for long-distance delivery and export.”
Other issues include India's lack of large-scale electrolyser manufacturing capacity. “While there are ongoing efforts, such as the Production-Linked Incentive schemes, to promote domestic electrolyser manufacturing, it is still in its early stages,” said Raju. “Furthermore, the integration of green hydrogen production with renewable power sources remains a challenge. India's grid infrastructure still requires significant upgrades to ensure a stable and continuous supply of renewable energy, particularly for round-the-clock green hydrogen production.”
Regulatory uncertainty and delays in implementing policies, such as repeated postponements of the green ammonia auctions, also slow momentum. Green hydrogen-based ammonia auctions have been repeatedly delayed due to concerns raised by prospective bidders over the structure and terms of proposed tenders.
“Several issues have been raised by both suppliers and buying ammonia facilities regarding the auction structure,” noted Sunasra. “Fertiliser companies have strongly objected to the tender design, citing limited offtake flexibility, lack of direct contracts with producers and overall one-sided terms.”
Developers have also requested the option to bid in foreign currency to attract international investors and reduce forex risk, as well as increase contracts from the current 10-year term to 25 years to improve project bankability.
The latest auction, which originally aimed to award ten-year supply contracts for 539,000t/yr, was later revised to 724,000t/yr as well as extended to cover 13 fertiliser plants (up from 11). “These repeated changes indicate ongoing challenges in aligning commercial viability with government procurement expectations,” stressed Roy.
Barriers to growth
While the National Green Hydrogen Mission has laid a solid foundation, there are still significant gaps in execution, long-term policy clarity as well as the establishment of carbon pricing mechanisms.
“One of the most pressing issues is the pricing mismatch with current production costs exceeding the price buyers are willing to pay, with green hydrogen costing more than $5/kg, while the market demand is below $4/kg,” explained Saxena. “The pricing mismatch when it comes to green ammonia is even more stark, with green ammonia being offered at $800 per metric tonne, which is considerably higher than the conventional imports being priced at around $398 per metric tonne.”
Compounding these issues are policy-level challenges, including the absence of enforceable long-term frameworks and insufficient private-sector incentives. India has announced large-scale initiatives such as the Mission and SIGHT scheme, but lack of detailed regulations and standards continue to limit confidence for financial institutions and developers.
Another major obstacle is the relatively modest level of government funding compared to other international peers. India has committed around $2.4b under the National Green Hydrogen Mission, but this figure is much lower than that of the US and EU. Regulatory and implementation delays also compound these challenges.
“India faces geopolitical and competitive pressures as countries like the US, EU, China and Gulf states are investing far more aggressively in green hydrogen, with public support packages that dwarf India's current commitment,” emphasised Saxena. “The US Inflation Reduction Act and EU Hydrogen Bank offer long-term price guarantees and tax credits, creating a subsidy gap that could ultimately divert global investors away from India.”
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