India’s green hydrogen sector is confronting a structural slowdown, with 94% of planned production capacity still at the announcement stage despite extensive policy signaling and investor interest.
The latest analysis from the Institute for Energy Economics and Financial Analysis (IEEFA) underscores a widening gap between ambition and execution, raising concerns about India’s ability to position itself as a competitive global supplier by the end of the decade.
The National Green Hydrogen Mission, launched in 2023 with a $2.2 billion budget and a headline target of 5 million metric tonnes per annum (MMTPA) by 2030, was designed to catalyze large-scale deployment. Yet government officials now concede the target is likely to slip to 2032. This delay reflects broader market frictions: insufficient infrastructure, high production costs, and a persistent lack of clear demand signals have slowed project maturation. As of August, only 2.8% of the country’s 158 announced projects were operational, and just 0.1% had entered construction, even though total planned capacity exceeds 11.2 MMTPA.
The cost challenge remains central. Green hydrogen production in India is still priced above what industrial buyers in steel, chemicals, refining, and heavy transport are willing to commit to. Without credible purchase pathways, developers face difficulty achieving financial closure despite favorable land availability and declining renewable power prices. IEEFA’s data suggests that this disconnect is inhibiting the formation of a stable demand base, reinforcing hesitation among early adopters.
Industry estimates place India’s overall hydrogen demand between 15–20 MMTPA by 2030, with green hydrogen theoretically capable of supplying up to one-third of that volume if policy and market reforms materialize. The report highlights that demand creation must be coordinated rather than left to individual developers or end-users. Hydrogen purchase obligations, multi-sector demand aggregation, and the creation of hydrogen hubs with shared infrastructure—particularly pipelines, storage, and port export terminals—are cited as measurable interventions to reduce the cost of delivered hydrogen.
The argument extends beyond domestic reform. Global collaboration is becoming increasingly necessary as export-led strategies gain prominence in hydrogen-producing countries. For India, aligning its emerging standards, certification systems, and logistics with international import markets could help stabilize long-term demand and reduce investor uncertainty. As Charith Konda, energy specialist at IEEFA, noted, long-term decarbonization goals will not be met solely through high-level commitments. Market uptake depends on a combination of structural policy incentives and practical, sector-specific action.
Stay updated on the latest in energy! Follow us on LinkedIn, Facebook, and X for real-time news and insights. Don’t miss out on exclusive interviews and webinars—subscribe to our YouTube channel today! Join our community and be part of the conversation shaping the future of energy.
