India’s green hydrogen sector is gradually moving from policy development to early implementation, with manufacturing incentives, industrial pilot projects and infrastructure development supporting the transition. The country had commissioned around 8,000 tonnes of annual green hydrogen production capacity by February 2026, according to government data, The Economic Times reported.
Green hydrogen is produced by splitting water into hydrogen and oxygen using renewable electricity. It is being explored as a cleaner alternative to fossil-fuel-based hydrogen in sectors such as fertilisers, petroleum refining, steel manufacturing, heavy-duty transport and shipping.
At the centre of India’s strategy is the National Green Hydrogen Mission (NGHM), approved by the Union Cabinet in January 2023 with an outlay of Rs 19,744 crore. The mission aims to develop at least 5 million tonnes of annual green hydrogen production capacity by 2030, with the potential to reach 10 million tonnes if export demand supports further expansion.
A key component of the mission is the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, which has an allocation of Rs 17,490 crore up to 2029-30. It provides incentives for domestic electrolyser manufacturing and green hydrogen production to strengthen local manufacturing and expand supply.
The government has awarded incentives to 15 companies for setting up electrolyser manufacturing capacity of 3,000 MW annually. Incentives have also been awarded for green hydrogen production capacity of 8.62 lakh tonnes per year. By October 2026, Indian companies had signed green hydrogen offtake commitments exceeding 5.5 lakh tonnes annually, indicating growing interest from potential industrial buyers.
Industrial applications offer growth opportunities
Fertiliser manufacturing and petroleum refining are among the immediate potential markets for green hydrogen, as both sectors already consume large quantities of hydrogen.
In fertiliser production, hydrogen is combined with nitrogen to manufacture ammonia, a key raw material for nitrogen-based fertilisers. Replacing natural gas-based hydrogen with renewable hydrogen could reduce emissions from ammonia production.
In petroleum refineries, hydrogen is used to remove sulphur from fuels and process heavier crude oil fractions. Its replacement with green hydrogen could help reduce emissions from these operations.
Steel manufacturing offers another significant application. Green hydrogen can be used as a reducing agent in certain direct-reduced iron processes, replacing coal and reducing carbon dioxide emissions during iron ore processing.
Other potential applications include blending hydrogen into city gas networks, subject to safety standards and infrastructure compatibility. Hydrogen fuel cells are also being explored for buses, trucks and trains, while green ammonia and green methanol derived from hydrogen could support the decarbonisation of shipping.
Pilot projects test hydrogen technologies
India is also advancing pilot projects to assess the commercial and technical viability of green hydrogen across industrial and transport applications.
In the steel sector, five pilot projects have been sanctioned, with Rs 84 crore allocated to test 100% hydrogen injection.
In road transport, 12 projects are planned to deploy 70 hydrogen-powered vehicles, comprising 27 buses and 43 trucks. These initiatives cover fuel-cell electric vehicles and hydrogen internal combustion engine vehicles.
The planned network includes 16 hydrogen refuelling stations across 21 routes. The government has released Rs 41.58 crore in financial assistance for these initiatives.
Rail transport has also recorded progress, with India’s first indigenous hydrogen-powered train inaugurated on July 17, 2026, on the Jind-Sonipat section. The 10-car trainset has a passenger capacity of around 2,600. A hydrogen storage facility at Jind can hold nearly 3,000 kg of hydrogen.
In the maritime sector, V.O. Chidambaranar Port Authority has awarded a Rs 38.12 crore pilot project to develop green methanol bunkering and refuelling facilities. The project includes a Rs 35 crore grant from the Ministry of New and Renewable Energy.
These initiatives are expected to help test technologies, identify infrastructure and regulatory gaps, and generate experience for expanding green hydrogen applications.
The next challenge will be scaling up
While India has made progress in manufacturing incentives, pilot projects and initial production capacity, the gap between commissioned capacity and the 2030 target remains substantial. Expanding renewable electricity supply, developing electrolyser manufacturing, establishing storage and transportation infrastructure, and securing long-term industrial buyers will be important for scaling up the sector.
