India’s Green Hydrogen Push Faces Hurdles: Cost, Infrastructure Lag

Global Energy Woes Boost India’s Green Hydrogen Push, But Challenges Remain

The current wave of global energy instability, fueled by geopolitical tensions, serves as a stark reminder of India’s vulnerability to volatile imported fossil fuel prices. While this crisis intensifies the strategic need for energy independence and accelerates the push towards domestic renewable energy, it also highlights the practical challenges slowing India’s ambitious green hydrogen and green ammonia agenda. The nation’s policies, while strong in intent, face significant hurdles that could slow the transition from policy to reality.

Ambitious Targets Meet High Costs

India’s National Green Hydrogen Mission (NGHM) aims for 5 million metric tonnes per annum (MMTPA) of green hydrogen by 2030. However, by February 2026, only about 8,000 tonnes per annum (TPA) were commissioned, showing a significant gap in implementation. This is largely because green hydrogen remains more expensive than grey hydrogen. While projections aim for a Levelized Cost of Hydrogen (LCOH) around $2/kg by 2030, current estimates for 2024-2025 are $3.5-$5/kg. Even competitive bids for green ammonia have seen prices around ₹49.75 per kg ($0.52/kg) under favorable contracts, still requiring policy incentives to compete with conventional ammonia. The cost of renewable energy, making up 50-70% of green hydrogen production costs, is critical. Without substantial, sustained subsidies and further cost reductions in electrolyzer technology, economic viability at scale is difficult to achieve.

Manufacturing Gaps and Infrastructure Hurdles

A major hurdle is India’s reliance on imported technology and components, especially for electrolyzers. While the government supports domestic manufacturing through schemes like PLI under SIGHT, targeting 15 GW of electrolyzer capacity by 2030, many critical parts are still imported. The potential for domestic production is estimated at 80% for alkaline electrolyzers and 72% for PEM electrolyzers, showing more work is needed for a self-reliant supply chain. Beyond manufacturing, a lack of robust hydrogen storage and transportation infrastructure presents another challenge. Hydrogen’s properties require significant investment in specialized pipelines, storage, and refueling infrastructure, a development that has lagged behind production ambitions.

Key Sectors and Global Ambitions

Green ammonia’s potential to decarbonize India’s large fertilizer sector, which uses 17-19 million tons annually, is a key driver of the NGHM. Agreements for green ammonia supply aim to reduce import dependence and save foreign exchange, positioning India as a major player. Green hydrogen is also targeted for hard-to-abate sectors like steel, refining, aviation, and shipping where electrification is difficult. Major Indian companies like Reliance Industries, Larsen & Toubro, NTPC, and Adani Group are investing heavily, using their scale and existing infrastructure. Globally, India aims to use its renewable energy potential and policy support to become a hub for green hydrogen and ammonia exports, competing with other nations.

Risks and Realistic Outlook

The optimistic narrative around India’s green hydrogen future faces several risks. For example, green ammonia bids often rely on optimistic cost assumptions, with projects depending on tender subsidies and perfect operational efficiency. The sector’s reliance on imported electrolyzer technology creates vulnerability, potentially swapping one energy dependence for another. Analysts note hydrogen is best suited for specific, hard-to-abate industrial applications, not as a universal solution. Indian stock markets have historically been volatile during energy price shocks; the Nifty 50 saw declines of about 9-10% in 2026 due to rising crude oil prices. This sensitivity shows how external energy shocks can hurt economic stability and investor confidence, potentially slowing the capital-intensive green hydrogen transition.

Moving Forward

India’s drive towards green hydrogen and ammonia is strategically sound, offering a path to reduce import dependence, enhance energy security, and meet climate goals. Government initiatives like the NGHM and related financial incentives provide a foundation. However, realizing its potential depends on bridging the gap between ambition and execution. Continued focus on reducing production costs, accelerating domestic manufacturing, developing essential infrastructure, and ensuring consistent policy implementation will be key. Without addressing these challenges, India risks its ambitious green hydrogen targets remaining aspirational rather than transformative.