India’s hydrogen demand is expected to nearly double to around 12 million tonnes per annum (mtpa) by 2030, driven mainly by the fertiliser, refining and petrochemical sectors, news agency ANI reported, citing a Nuvama Institutional Equities report.
Nuvama estimates that fertilisers will account for over half of total demand at about 6.1 mtpa, while refineries could require 4.5 mtpa. Petrochemical demand is projected to reach 1.3 mtpa as new capacity comes on stream. In the longer term, green hydrogen consumption could expand into sectors such as steel, long-haul transport, shipping and power generation.
Policy support under National Green Hydrogen Mission
India’s hydrogen strategy is anchored by the National Green Hydrogen Mission, which has an outlay of about ₹19,700 crore. A significant share of the funding is linked to the SIGHT scheme, which supports green hydrogen production, usage and electrolyser manufacturing. Additional backing is provided through pilot projects and research and development initiatives.
Since the launch of the green hydrogen policy in 2022 and the Mission in early 2023, 13 states have rolled out their own support measures. These include waivers on transmission charges, subsidies, interest support, training programmes and concessions on land and state taxes. Combined central and state incentives could amount to nearly $61 billion or ₹5.5 lakh crore, creating a broad base for industry participation.
Cost gap key challenge
Despite policy momentum, cost remains a major hurdle. Green hydrogen currently costs $3.5–4 per kg, compared with about $2.2 per kg for grey hydrogen. The report said policy interventions and market improvements could reduce green hydrogen costs by up to $1.9 per kg, with waivers on power banking and open access charges accounting for a substantial portion of the savings.
Lower electrolyser costs and declining renewable energy tariffs are also expected to contribute to cost reductions.
Export competitiveness and technology outlook
India faces competition in exporting green ammonia, with recent tender prices ranging from $594 to $774 per tonne. While domestic solar and wind costs are relatively low, higher financing costs and lower plant load factors may affect competitiveness.
On the technology front, electrolyser stack costs could fall by up to 75 per cent through innovation, alternative materials and domestic manufacturing. The report said up to 88 per cent of the electrolyser supply chain could be localised, reducing import dependence.
While wider adoption in steel, transport and power is expected beyond 2030, the report noted that current efforts remain focused on cutting costs and building foundational infrastructure.
