India is stepping up efforts to transform green hydrogen into a major export industry. Abundant renewable energy resources, supportive government policies and growing international demand for clean fuels will help the country emerge as a competitive global supplier over the next decade. The global push towards decarbonisation is accelerating demand for green hydrogen.
In Europe, Japan and South Korea, industries are seeking low-carbon alternatives for steelmaking, shipping, chemicals and heavy transport. As per the National Green Hydrogen Mission, the goal of the country is to produce 5 million tonnes of green hydrogen per year by 2030, while bringing investments worth more than Rs. 8 lakh crore and generating jobs in thousands for manufacturing and renewables.
As per industry experts, the country’s affordable solar and wind energy resources could give it an edge over many other countries. But converting this into a competitive advantage in exports would involve huge investment in electrolysers, storage, and ports.
Weakening of the Indian Rupee Can Make Hydrogen Exports Competitive
The rupee has been under pressure amid economic uncertainty worldwide. There has been depreciation of the rupee to the tune of 2-3 per cent against the USD within a year, making Indian exports more competitive in foreign markets, while the price of imported machinery for hydrogen production has risen. India already has more than 230 GW capacity of renewable energy that could help to produce inexpensive green hydrogen.
With the reduction in the price of renewable electricity, there are expectations from economists that the cost of production will gradually become competitive with conventional fossil fuel-based hydrogen.
“India’s success in its green hydrogen efforts is less dependent on production capacity and more on developing a globally competitive value chain,” according to Dr Suranjali Tandon, Associate Professor, National Institute of Public Finance and Policy.
Infrastructure and Global Competition Remain Key Challenges
Even with a clear policy push in this direction, India will still have tough competition coming from countries like Australia, Saudi Arabia, and the Middle East, which have been pushing hard to make green hydrogen exports profitable for themselves. The good news is that, according to the economists, India’s future looks bright because of the rush of countries toward zero emissions.
Trade agreements between India and other economies in Europe and Asia could help the country further improve its export opportunities. With the world making its way into the era of clean energy, green hydrogen might well become one of the top exporting industries of India in the coming decade.
