India’s ambition to produce 5 million tonnes per annum (MTPA) of green hydrogen by 2030 under the National Green Hydrogen Mission (NGHM) remains a challenging target as the country’s current operational capacity is still below 10 kilo tonnes per annum (KTPA). Most existing projects are at the pilot stage, highlighting the early phase of India’s green hydrogen journey. While the government has laid a strong policy foundation, the pace of project execution will need to accelerate significantly over the next few years to achieve the desired scale.
One of the biggest challenges is the long development timeline for green hydrogen projects. New technologies, delays in procuring electrolysers and other equipment, along with the time required to build renewable energy plants, have slowed progress. So far, around 1.2 MTPA of green hydrogen equivalent capacity has been auctioned under the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme. Unless the government increases the pace of auctions within the next year, this auctioned capacity could limit near-term growth. Although the total SIGHT budget has the potential to support nearly 2.7 MTPA of production, an additional 1.5 MTPA of projects will need to be tendered by 2027 to remain on track for the 2030 goal.
Government support for the sector extends beyond central incentives. Several policy measures are helping improve the investment environment, including the waiver of Inter-State Transmission System (ISTS) charges until 2034, benefits for projects located in Special Economic Zones (SEZs), 100% Foreign Direct Investment (FDI) through the automatic route, and selected exemptions from Approved List of Models and Manufacturers (ALMM) and Revised List of Models and Manufacturers (RLMM) requirements.
State governments are also playing an active role. Around 15 out of 24 surveyed states have introduced dedicated green hydrogen policies offering electricity subsidies, land incentives and capital support. Coastal states such as Odisha and Andhra Pradesh are emerging as potential export hubs, targeting demand from East Asian markets where green hydrogen and green ammonia could command higher prices. At the same time, domestic demand is expected to reach nearly 2 MTPA by the early 2030s.
Recent SIGHT auctions have demonstrated strong industry interest and competitive pricing. Under Component 2A, which focuses on green ammonia supply for fertilizer companies, 724 KTPA was awarded across 13 projects. Winning bids came in well below reserve prices, with the lowest effective tariff reaching around Rs 52 per kilogram after government incentives. Similarly, Component 2B, aimed at supplying green hydrogen to oil and gas refineries, witnessed intense competition, pushing tariffs down to Rs 279 per kilogram.
India’s push for green hydrogen has also gained urgency due to its dependence on imported natural gas. A significant share of conventional hydrogen production relies on imported gas, particularly from the Middle East. Recent geopolitical tensions in the region have disrupted supplies and increased gas prices, affecting industries such as fertilizers and glass manufacturing. These developments have strengthened the case for expanding domestic green hydrogen production to improve energy security and reduce import dependence.
Industry experts believe that early investments should focus on sectors where green hydrogen can become commercially viable more quickly, including refining and ammonia production. At the same time, strengthening domestic research and development while leveraging globally competitive electrolyser manufacturing could help India build a sustainable and cost-effective green hydrogen ecosystem in the years ahead.
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