India’s green hydrogen sector is moving towards project execution as incentives cover 8.62 lakh tonnes per annum of production capacity, but financing, offtake and cost remain key challenges
India’s green hydrogen sector is moving from policy allocation towards project execution, with incentives awarded for 8.62 lakh tonnes per annum of green hydrogen production and 3,000 MW per annum of domestic electrolyser manufacturing, even as most of the country’s planned capacity remains at early stages of development.
Speaking at Horizons Clean Energy Expansion India 2026 by S&P Global Energy, Union Minister for New and Renewable Energy Pralhad Joshi said the National Green Hydrogen Mission was beginning to translate policy support into commercial activity, with recent price discoveries for green hydrogen and green ammonia providing benchmarks for the emerging market. “India’s green hydrogen journey is built on a very strong renewable energy foundation,” he said.
S&P Global Energy data shows that India has a renewable hydrogen production pipeline of more than 6 million tonne per year. Of this, about 112,752 tonne has been financed, and 11,329 tonne are operational, highlighting the gap between planned capacity and projects that have reached financing or operations.
The lowest discovered price for green ammonia was Rs 49.75 per kg. Green hydrogen, for example, was priced at Rs 279 per kg in a tender for supply to Numaligarh Refinery, which is under the ownership of the Ministry of Petroleum and Natural Gas, Joshi said.
From Incentives To Projects
The National Green Hydrogen Mission has an outlay of Rs 19,744 crore. Under the Strategic Interventions for Green Hydrogen Transition programme, incentives have been awarded for 8.62 lakh tonnes per annum of green hydrogen production and 3,000 MW per annum of domestic electrolyser manufacturing.
The government is also attempting to build demand alongside production. Joshi said refinery-linked green hydrogen capacity of 30,000 tonnes per annum had been awarded, while the Mission is supporting pilot projects in areas including steel, mobility, refuelling infrastructure and testing facilities. The objective is to create an initial domestic market for green hydrogen while reducing dependence on imported fossil fuels, Joshi said.
The focus on demand is necessary because project developers still need firm offtake arrangements, financing and supporting infrastructure before large announced capacities can translate into operating assets. Recent government-backed tenders have established initial price benchmarks, but the economics of green hydrogen remain central to industrial adoption.
S&P Global Energy assessed India’s renewable hydrogen term-contract price at USD 3.22 per kg as of 10 September. It also reported that hard-to-abate industrial users are looking for renewable hydrogen at around USD 1.50-USD 1.75 per kg to support commercial viability, particularly when combined with carbon pricing.
The difference between that target range and the market assessment highlights the cost challenge facing large-scale adoption. The issue is particularly relevant for industries such as steel, refining and fertilisers, where hydrogen can play a role in replacing fossil-fuel-based processes but where the economics of switching remain critical.
Certification Becomes Market Priority
As projects move closer to commercial operations, certification and market transparency are also becoming important. India launched its Green Hydrogen Certification Portal in June 2026 to facilitate transparent certification and regulatory compliance under the Green Hydrogen Certification Scheme of India.
The certification framework will establish greater clarity around the origin and carbon intensity of green hydrogen. The scheme provides a mechanism for standardising and verifying the origin and carbon intensity of hydrogen produced in India.
For India’s green hydrogen industry, the next phase will therefore depend less on the announcement of production capacity and more on converting awarded projects into financed, constructed and operational assets.
Policy incentives and emerging demand programmes have established the initial market framework. The pace of financing, renewable-power availability, infrastructure development, offtake commitments, and cost reduction will determine how quickly that framework translates into a functioning industrial market.
Sonali Chawhan
BW Reporters The author is a Trainee Correspondent at BW Businessworld.
