iNDICA NEWS BUREAU-
India’s leading industry body has called on the government to take stronger policy steps to accelerate the growth of a domestic green hydrogen market, saying mandatory usage backed by financial support is needed to create stable demand and bring down costs.
The Confederation of Indian Industry (CII) on Wednesday, January 14, urged the introduction of green hydrogen mandates across key sectors, arguing that the large cost gap between green hydrogen and conventional grey hydrogen remains a major barrier to adoption.
It said greening mandates supported by incentives could help overcome this challenge and enable a vibrant green hydrogen economy.
“The proposed Green Hydrogen Blending could be introduced for sectors like refining, fertiliser and natural gas with cost-offset mechanisms. The sectors that use grey hydrogen extensively are best positioned to pioneer large-scale demand for green hydrogen,” the statement said.
According to CII, such mandates would give producers long-term demand certainty, allowing faster cost reductions through economies of scale.
The industry body recommended phased mandates combined with support measures such as carbon credit allocations for emissions savings, cross-subsidies, and sector-specific incentives.
It pointed in particular to the fertilizer sector, suggesting lower natural gas prices for producers that blend green hydrogen. CII also called for viability gap funding to reduce the financial burden on consumers and industry during the transition.
CII Director General Chandrajit Banerjee said India is well placed to take the next step in clean technology adoption after a strong year for renewable energy. He noted that India recorded a major milestone in 2025, with non-fossil fuel installed capacity rising to 266.78 gigawatts, a 22.6 percent increase over 2024. During the year, 49.12 gigawatts of new non-fossil capacity was added, up from 217.62 gigawatts in the previous year.
CII said demand for green hydrogen could also be strengthened by mandating public procurement in government projects. It suggested that 10 to 15 percent of infrastructure-related materials such as steel and ammonia used in public works should come from green hydrogen-based production units. Such measures would help create predictable demand and bring down green product prices as production scales up.
The industry body also urged a faster shift to green steel and green ammonia in export-oriented sectors, warning that access to premium global markets could be at risk if India lags on decarbonization. It said stronger demand for green hydrogen would improve cost efficiency and help mature the entire value chain over time.
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