India has commissioned approximately 8,000 tonnes per annum of green hydrogen production capacity as of February 2026, marking an early-stage milestone under the National Green Hydrogen Mission.
The figure, disclosed by Shripad Yesso Naik in the Rajya Sabha, underscores both the initial traction and the scale gap that remains relative to the government’s 2030 target of 5 million metric tonnes per annum.
From a capacity perspective, the current deployment represents a fraction of the long-term ambition, highlighting the structural challenge of scaling hydrogen production in a cost-sensitive market. However, the commissioning of early projects signals that policy frameworks and funding mechanisms are beginning to translate into physical assets. This phase is less about volume and more about establishing supply chains, project execution capabilities, and demand anchors across refining and industrial sectors.
Financial deployment under the mission reflects a gradual acceleration. Of the approximately Rs 700 crore allocated since inception, Rs 250.12 crore has been utilized. The spending trajectory illustrates how project pipelines are moving from planning to execution, with utilization rising from Rs 0.11 crore in FY24 to Rs 46.26 crore in FY25, and reaching Rs 203.75 crore in FY26 so far against a Rs 300 crore allocation.
This ramp-up indicates improved administrative and project-level readiness, but also suggests earlier delays in fund absorption. Such patterns are typical in emerging sectors where regulatory clarity, land acquisition, and supply chain readiness can slow initial disbursement. The increase in FY26 spending aligns with the commissioning of pilot-scale facilities, suggesting that capital deployment is now more closely linked to tangible project milestones rather than preliminary approvals.
Price Discovery Highlights Persistent Cost Barriers
Cost competitiveness remains a central constraint for green hydrogen adoption in India. Recent competitive bidding outcomes place prices at approximately Rs 397 per kilogram for Indian Oil Corporation refineries and Rs 387 per kilogram for Bharat Petroleum and Hindustan Petroleum, inclusive of 18 percent GST. These figures remain significantly above conventional hydrogen production costs derived from fossil fuels, limiting immediate large-scale substitution.
A key driver of these costs is renewable energy input, which accounts for an estimated 50 to 70 percent of total production expenses, translating to roughly Rs 235 per kilogram. This cost structure links hydrogen economics directly to renewable power pricing and availability, making grid integration, storage, and renewable capacity expansion critical to long-term viability. Without substantial reductions in renewable tariffs or electrolyzer costs, green hydrogen is likely to remain dependent on policy support mechanisms to achieve parity with grey hydrogen alternatives.
The gap between the current 8,000 tonnes per annum capacity and the 5 million tonne target by 2030 highlights the scale of expansion required. Achieving this trajectory will depend on parallel growth across multiple variables, including electrolyzer manufacturing capacity, renewable energy deployment, and industrial demand creation.
