Green hydrogen is slowly becoming a key component of India’s low-carbon transition. Its role in cutting industrial emissions, reducing dependence on imported fossil fuels, and improving long-term energy security has elevated it to the policy priority list. Policy measures, such as the National Green Hydrogen Mission, waivers on interstate transmission system charges, and production-linked incentives for green hydrogen and electrolysers, have helped build a strong policy foundation for its uptake. As a result, industry interest has gained momentum, with public and private players announcing projects across green hydrogen, green ammonia and electrolyser manufacturing.
Green hydrogen functions not just as an energy source, but as an energy carrier as well. When excess electricity from solar or wind sources is available, it can be used to split water into hydrogen through electrolysis, effectively storing renewable energy in a chemical form rather than losing it. This hydrogen can be stored for long periods, transported with relative ease, and later used to generate electricity, produce heat, or fuel industrial processes. This way, green hydrogen acts much like a large-scale, long-duration battery. This makes it particularly valuable for seasonal energy storage and for hard-to-abate sectors where direct electrification remains challenging.
The Indian hydrogen energy storage market is valued at around $720 million, according to Ken Research. Hydrogen’s fundamental advantage is that it has the highest energy content per unit mass of any fuel, making it well suited for storing large quantities of energy over long periods. Hence, over the long term, green hydrogen could gradually compete with pumped hydro storage and battery energy storage systems. As domestic manufacturing expands and production volumes rise, economies of scale are expected to drive down costs. This cost trajectory is critical. According to the FICCI-EY report “India’s Green Hydrogen Strategic Opportunities, Key Challenges, and Demand Potential by 2030”, the cost of green hydrogen could fall to Rs 260-Rs 310 per kg, significantly improving its viability for long-duration and grid-scale storage applications. Growing uptake across applications will further assist in cost reduction. Some sectors where the uptake of green hydrogen can already be observed are fertiliser and transportation, with pilots and early-stage initiatives in steel and microgrids.
Fertilisers
Hydrogen is the fundamental building block for ammonia, which is a key component in the production of fertilisers. According to the FICCI-EY report, ammonia consumption in India stands at 17-19 million tonnes per annum (mtpa), and the fertiliser sector accounts for over half of this demand. As most of this ammonia is derived from imported natural gas, it makes the fertiliser sector both carbon-intensive and import-dependent. Green ammonia addresses this challenge while also underscoring hydrogen’s role as an energy carrier and storage medium: by binding hydrogen with nitrogen, it converts a hard-to-store gas into a stable liquid that can be transported using existing infrastructure and later cracked back into hydrogen when needed.
In September 2025, the Solar Energy Corporation of India announced the results of the Tranche 2A green ammonia auction under SIGHT Mode 1 for fertiliser offtake. In total, 13 green ammonia projects were awarded under this tender, collectively targeting a capacity of 724,000 tonnes per annum to be supplied to fertiliser plants. The discovered tariff ranged from Rs 49.75 per kg to Rs 64.74 per kg, a notable milestone as prices were only marginally higher than the prevailing grey ammonia costs. This outcome clearly signals that green ammonia as an energy carrier and storage vector is moving rapidly towards cost competitiveness and large-scale commercial adoption in India.
Transportation
According to the Institute for Energy Economics and Financial Analysis report “Enabling Sustainable Demand for Green Hydrogen in India”, green hydrogen demand from the transportation sector is projected to be substantial by 2030. Under the base case with minimum policy interventions, the demand is estimated at around 1.35 million metric tonnes per annum (mmtpa), increasing to nearly 1.8 mmtpa in a more mature scenario where green hydrogen prices fall by about 50 per cent. This growing demand outlook is already being mirrored in on-ground deployments across road, maritime and railways.
In March 2025, the Ministry of New and Renewable Energy (MNRE) launched five pilot projects to deploy 37 hydrogen-powered buses and trucks covering both fuel cell and hydrogen internal combustion engine technologies, supported by nine refuelling stations and an allocation of Rs 2.08 billion.
In September 2025, India inaugurated its first port-based green hydrogen pilot at V.O. Chidambaranar Port, where green hydrogen is being used for local energy needs within the port.
In January 2026, Northern Railway announced that it would soon commence a pilot run of India’s hydrogen train on the Jind Sonipat route.
Steel
India is the world’s second largest producer of crude steel and the largest producer of direct reduced iron (DRI), supported by rapidly growing domestic demand, according to the “India Insights Briefing: Unlocking India’s Clean Industrialisation Opportunity”, published by the Industrial Transition Accelerator (ITA) and BCG. As of FY 2024-25, the sector contributed nearly 2 per cent to India’s GDP, accounted for about 8 per cent of global crude steel production, and nearly 40 per cent of the global DRI output. In such a situation, decarbonising the steel sector becomes critical, and the use of green hydrogen in the sector emerges as a key pathway to reduce emissions.
Application of green hydrogen is in early stages in the steel sector, with just two commercial-scale projects having been announced. The first project is a 4 mtpa green steel project by JSW (to be carried out in two phases of 2 mtpa each) involving the phased transition of a natural gas-based plant to a green hydrogen plant, according to the ITA-BCG report. Furthermore, in a major development, JSW Energy Limited has commissioned its first and the country’s largest green hydrogen manufacturing plant in November 2025. The project is under the production-linked incentive scheme Tranche I and is located adjacent to the JSW Steel facility at Vijayanagar, Karnataka. The plant will supply green hydrogen directly to the DRI unit of the steel facility for low-carbon steel production. The second major initiative is a pilot for green hydrogen injection into a blast furnace by Steel Authority of India Limited. Beyond these two projects, a few other pilot projects are in the testing phase, and some of these are supported by the Ministry of Steel.
Microgrids
Green hydrogen can also be used in microgrids, providing electricity to remote areas and enabling energy independence. In November 2025, NTPC’s 3.7 MW solar plant, a solar-hydrogen project, was inaugurated in Ladakh. The company has designed a standalone microgrid using hydrogen as the storage medium to supply 200 kW of power at any time of the day, throughout the year. Furthermore, the solar-hydrogen microgrid will replace the diesel generator sets currently operating at remote army sites. This will help in cutting carbon emissions and ensuring a cleaner, more dependable energy supply for the region. In 2021, NTPC Simhadri awarded a standalone fuel-cell-based 50 kW microgrid pilot project with hydrogen production using an electrolyser to Bloom Energy India Private Limited, Bengaluru. The hydrogen will be produced using the advanced 240 kW solid oxide electrolyser by taking input power from the nearby floating solar project.
Challenges and the way forward
Despite growing interest, several barriers continue to impede the adoption of green hydrogen in India. Cost remains the single biggest hurdle. As per the FICCI-EY report, while grey and black hydrogen are available at Rs 150-Rs 220 per kg, green hydrogen costs are twice as high, hovering around Rs 350-Rs 500 per kg, even without factoring in additional expenses for compression, liquefaction, or conversion into ammonia.
Another key constraint is the availability of round-the-clock renewable power. Large electrolysers require continuous, reliable, clean electricity to operate efficiently, but the variable nature of renewable generation complicates this. Regulatory uncertainty around transmission access, energy banking and storage integration, particularly for gigawatt-scale projects, continues to dent developer confidence.
Water availability is yet another issue. Producing 1 kg of hydrogen typically requires 12-13 kg of purified water. Given that pure water is a scarce commodity in the country, the government is prioritising the development and demonstration of technologies that can enable hydrogen production from low-grade water sources, such as seawater and wastewater. At the same time, delays in clearances and competing land-use priorities have already slowed project execution. Scaling up to support India’s 5 mmt per year green hydrogen target by 2030 will require an estimated 125 GW of additional dedicated renewable energy capacity, along with robust water logistics and strong domestic electrolyser manufacturing capabilities.
Addressing these challenges is critical if green hydrogen is to move beyond niche applications and emerge as a viable energy storage solution at scale. A combination of cost support, clear long-term mandates, and better system-level planning will be crucial. As costs decline and policies mature, green hydrogen can gradually assume a meaningful role in India’s energy storage and decarbonisation landscape.
