India’s green hydrogen production currently costs between $4.40 and $4.80 per kilogram in favorable states, against a grey hydrogen equivalent of $2.30 to $2.50 per kilogram. The National Green Hydrogen Mission’s target of $2 per kilogram by 2030 requires simultaneous progress on renewable energy tariff reduction, domestic electrolyser manufacturing scale-up, high utilization rates, and access to concessional finance.
That cost gap is the central challenge against which every project announcement in India’s green hydrogen sector must be evaluated. The 4 MW project commissioned by NLC India Limited at Neyveli, Tamil Nadu, executed through a collaboration between Ohmium International and InSolare Energy, is a modest-scale industrial deployment that is commercially significant not for its volume but for the precedent it sets within India’s public sector undertaking ecosystem.
NLC India is a central government enterprise under the Ministry of Coal, operating lignite mines and thermal power plants across Tamil Nadu and Rajasthan. Its expansion into renewable energy and green hydrogen aligns with central government directives requiring public sector undertakings to develop non-fossil portfolios, and with Tamil Nadu’s position as one of the states offering additional capital subsidies for green hydrogen projects. The Neyveli plant is expected to produce up to 700 metric tons of green hydrogen annually from a 4 MW proton exchange membrane electrolyzer system. At that production rate, the plant’s output would supply hydrogen for power generation, industrial use, and mobility applications within NLC’s existing operational footprint, positioning the project as a multi-application pilot rather than a single-sector supply agreement.
The pairing of Ohmium’s PEM electrolyzer technology with InSolare’s EPC execution capability is commercially logical for a project of this type. PEM electrolyzers carry advantages over alkaline systems in dynamic load-following conditions, which is particularly relevant when the input renewable power supply is intermittent. Ohmium, headquartered in the United States with manufacturing facilities in India, raised $250 million in Series C financing led by TPG Rise Climate in 2023 and claims a global green hydrogen project pipeline exceeding 2 GW across three continents. InSolare brings a 1.5 GW-plus EPC portfolio across solar, wind-hybrid, battery storage, and green hydrogen projects in India. The combination addresses a recurring execution gap in Indian green hydrogen development: technically credible electrolyzer supply paired with domestic project delivery capability.
The electrolyzer manufacturing dimension of this partnership carries policy relevance beyond the project itself. India’s SIGHT program, the Strategic Interventions for Green Hydrogen Transition launched under the NGHM, allocates Rs 4,440 crore specifically for domestic electrolyzer manufacturing incentives, targeting 15 GW of installed electrolyzer manufacturing capacity in India by 2030. Ohmium’s India-based manufacturing and local service support infrastructure aligns directly with this policy objective. Domestic content requirements embedded in future SIGHT auctions are likely to favor suppliers with in-country manufacturing, making Ohmium’s India footprint a competitive parameter as well as a supply chain consideration.
The scale of the Neyveli project relative to India’s stated targets requires honest framing. The National Green Hydrogen Mission targets 5 million metric tons of annual green hydrogen production by 2030, potentially rising to 10 million metric tons if export markets develop. As of early 2025, announced green hydrogen project capacity in India exceeded 9 million metric tons per annum, more than the initial target, reflecting the supply-side enthusiasm the NGHM has generated. However, the gap between announced capacity and committed projects with funded financial close is substantial. Green hydrogen in India in 2026 is characterized by strong policy intent, credible technology, and a growing developer ecosystem, but demand certainty at commercial scale remains the binding constraint. The NLC India project represents a replicable model for public sector undertakings to establish operational learning while absorbing the capital cost of initial deployment within their existing balance sheets, without requiring the demand aggregation that commercial-scale projects need to be financeable.
The production cost trajectory matters enormously for whether projects of this type can scale. Analysts broadly agree that reaching $2 per kilogram without subsidy is unlikely before 2032 to 2035 for most project configurations in India, even as NGHM targets $2 per kilogram by 2030. The gap between target and trajectory is being narrowed from multiple directions: ISTS charge waivers for green hydrogen plants until 2030, open access provisions for renewable procurement, energy banking, and Viability Gap Funding through competitive auctions. Tamil Nadu’s state-level incentives add a further layer of support for projects within NLC’s operational geography. Even with this support stack, the economics at 4 MW scale are not representative of what a commercially viable hub-scale project requires. The value of early-stage industrial deployments like Neyveli lies primarily in operational data generation, workforce skill development, and hydrogen application validation rather than in immediate cost competitiveness.
The mobility application component listed among the plant’s intended uses is worth noting. India’s hydrogen mobility ecosystem remains nascent, with fuel cell bus and truck deployments in single-digit numbers nationally. NLC India’s mining and industrial operations at Neyveli do represent a captive fleet environment where hydrogen mobility pilots can be run without depending on public refueling infrastructure. The logic of a vertically integrated green hydrogen producer supplying its own captive industrial and transport loads is one of the more commercially coherent structures available to early movers in the Indian market, where the absence of hydrogen distribution networks makes hub-and-spoke models around large industrial campuses the most executable near-term pathway.
Budget utilization under the NGHM has improved materially in recent cycles, with Rs 203.75 crore deployed as of March 2026, representing a marked improvement in actual expenditure against allocations compared to prior years when disbursement significantly lagged approved budgets. That improvement reflects the pipeline of projects that is now reaching implementation stages, of which the NLC India plant is one example. The question that will define the NGHM’s success over the next four years is whether this growing implementation activity translates into cost reduction at the pace required to close the gap with grey hydrogen, or whether India’s green hydrogen sector remains dependent on policy support at scales that test the government’s long-term fiscal commitment to the mission.
