India’s strategic advantages and favorable investment opportunities position it as a potential global green hydrogen hub, according to a report by USAID.
With abundant renewable energy resources and existing consumption markets, Indian producers have the potential to achieve low-levelized costs for green hydrogen and green ammonia. The government’s proactive approach, exemplified by the National Hydrogen Mission, further propels the growth of the sector.
Demand for green hydrogen is expected to be driven by government incentives, subsidies, and mandates for its consumption. The hydrogen mission sets forth India’s vision to establish a green hydrogen production capacity of at least 5 million metric tons by 2030, leading to a substantial reduction of carbon emissions. India aims to position itself as a key exporter of green hydrogen, capturing 10% of the global import demand.
To meet the projected demand, India will need to add significant renewable energy capacity, electrolyzer capacity, and ammonia infrastructure. The estimated investment requirement amounts to approximately $56.7 billion.
However, several challenges need to be addressed to unlock the full potential of India’s green hydrogen sector. These challenges include project bankability, market demand aggregation, regulatory frameworks, and domestic supply chain expansion for electrolyzer parts.
Despite the challenges, India’s green hydrogen sector is expected to witness significant growth in the coming years, supported by the country’s renewable energy capacity and positive response from public and private institutions.