The Confederation of Indian Industry (CII) has formally called upon the government to introduce strong green hydrogen mandates to speed up demand and help India become a global leader in clean energy.
In a detailed proposal released in New Delhi, CII said that clear rules and assured demand are needed to close the cost gap between grey hydrogen, which is made from fossil fuels, and green hydrogen, which is cleaner and produced using renewable energy, ANI reported.
According to CII, the right policy push can give confidence to producers, lower costs over time, and support India’s growing clean energy goals.
Why is CII asking for green hydrogen blending mandates?
CII believes that blending green hydrogen into high-usage sectors is the fastest way to build demand. Mandated hydrogen blending in sectors such as oil refining, fertilisers, and natural gas has been recommended.
At present, green hydrogen is costlier than grey hydrogen. Because of this, many industries are slow to adopt it. CII says blending rules will create steady demand, which will help producers scale up operations. As production increases, costs are expected to fall due to economies of scale.
This, CII says, will make green hydrogen more affordable over time while reducing emissions.
How can costs be managed for industries and customers?
To reduce the financial pressure on companies and consumers, CII has proposed a phased rollout of blending mandates rather than sudden implementation.
It has also suggested several cost-support measures. These include carbon credits for emissions saved, viability gap funding, and cross-subsidy models.
In the fertiliser sector, CII suggests that companies that are ready to mix green hydrogen should be given less expensive natural gas. This strategy could be a means of cost sharing and, at the same time, an encouragement to the use of cleaner production methods.
CII believes these measures will be the industry’s way to green hydrogen without the negative of business unviability or the consumers’ sharp price increase.
How does India’s clean energy growth support this plan?
CII’s proposal comes after a strong year for India’s clean energy sector. In 2025, India’s non-fossil fuel installed capacity rose to 266.78 GW.
This marked a 22.6 per cent increase over 2024, when capacity stood at 217.62 GW. During 2025 alone, 49.12 GW of new non-fossil capacity was added.
CII Director General Chandrajit Banerjee said that after this record-breaking year, India must now focus on advanced clean technologies like green hydrogen to take the next big step in its energy journey.
Can government buying create a stable demand for green hydrogen?
Along with the industry mandates, CII has proposed turning around public procurement policies. It has been recommended that 10 to 15 per cent of the total materials consumption in public infrastructure projects be sourced from green hydrogen-based production.
The mentioned materials are steel, cement, and ammonia, which are used in the construction of bridges and railways. CII claims that this would lead to a steady and dependable demand for green hydrogen producers, which in turn would make the projects more secure and attractive for investments.
The guaranteed off-take will enable the new producers to enter the market with full confidence.
Why are green hydrogen clusters important for MSMEs?
The CII has suggested the establishment of green hydrogen industrial hubs in the states of Gujarat, Maharashtra, Tamil Nadu, and Odisha.
Larger users of hydrogen, including small and medium-sized industries in the ceramics and chemicals sectors, would be able to aggregate their demand. By sharing infrastructure like pipelines and storage facilities, costs can be reduced.
The CII proposes that these hubs be developed through public-private partnerships, which would enable the smaller industries to access clean energy that is easier and more affordable.
How can India become a global green hydrogen export hub?
On the global front, CII wants India to target a 5 to 7.5 per cent share of the global green hydrogen import market.
To achieve this, it has called for trade agreements with countries such as Germany, Japan, and South Korea. Harmonising certification standards will also help Indian exporters compete globally.
CII has further suggested granting “deemed export” status to green hydrogen derivatives to improve competitiveness.
With inputs from agencies.
