India’s global green hydrogen hub ambitions remain a non-starter

Almost two years after the launch of the National Green Hydrogen Mission (NGHM), India’s ambition of becoming a global hub for green hydrogen production, consumption and exports remains largely unrealised. Despite a flurry of announcements, most projects are still on paper, with actual construction and operations lagging far behind targets and plans.

Of the 158 green hydrogen projects announced so far, just 0.1% or 9,770 tonnes per annum (TPA) is under construction, while only 2.8% (0.3 million metric tonnes per annum, MMTPA) was operational as of August 2025. Data from the Ministry of New and Renewable Energy (MNRE) shows that nearly 94% of the announced green hydrogen capacity—around 11.2 MMTPA—remains at the announcement stage, with key details such as financing, offtake agreements and timelines yet to be finalised, according to experts at the Institute for Energy Economics and Financial Analysis (IEEFA).

“Although the announced capacity is nearly 2.4 times the government’s target, reflecting strong investor interest in India’s green hydrogen story, there are concerns about how much of this capacity will actually materialise,” says Charith Konda, Energy Specialist at IEEFA. “Challenges around adoption and demand remain unresolved.”

So far, the limited progress has come primarily from captive projects, such as oil refining and fertiliser manufacturing, where hydrogen demand is guaranteed. Beyond these sectors, projects face major hurdles—uncertain demand, high production costs, lack of standard definitions, and weak infrastructure for storage and transport, say experts.

Industry estimates suggest India’s total hydrogen demand could reach 15–20 MMTPA by 2030. With strong policy support, green hydrogen demand could rise to 4.08–6.57 MMTPA, driven by new applications in steel, transport, chemicals and exports. Launched in January 2023 with an outlay of ₹19,700 crore, the NGHM aims to enable 5 MMTPA of green hydrogen production by 2030, requiring investments of over ₹8 lakh crore (USD 90.5 billion). The government expects global demand for green hydrogen and its derivatives—such as green ammonia—to exceed 100 MMTPA by 2030, with India potentially capturing 10% of the export market.

Demand remains the weakest link

The biggest concern for investors is the absence of firm buyers. Globally, only 6% of planned green hydrogen capacity has secured offtake agreements, leaving about 94% or 212 million tonnes, without committed buyers, experts say. Without anchor customers, projects struggle to reach financial closure. India faces a similar challenge. While the NGHM sets production targets, it does not mandate purchase obligations for existing hydrogen consumers or potential users. Demand is expected to emerge organically from corporate initiatives and long-term climate goals, making it difficult to bank on.

“The demand for green hydrogen and its derivatives is expected to come from three sources—replacing grey hydrogen, new applications in hard-to-abate sectors, and exports,” says Kaira Rakheja, Energy Analyst at IEEFA.

High costs and infrastructure gaps

Cost remains another major barrier. While industry leaders such as Mukesh Ambani have spoken of producing green hydrogen at USD 1 per kg, current costs in India are still around USD 3–6 per kg.

Although India benefits from low solar tariffs of ₹2.5–3 per kWh, electrolyser costs remain high, ranging from ₹26,500 to ₹1,06,000 per kW, depending on technology and scale. The lack of domestic manufacturing capacity is also a concern. To meet the 5 MMTPA target, India would need 60–100 GW of electrolyser capacity by 2030, but by August 2025, only 3 GW had been awarded. Similarly, to operationalise 5 MMMTPA of green hydrogen, the country will have to add about 125 gigawatts (GW) of additional renewable energy capacity.  

Equally critical is infrastructure. Hydrogen storage and transport—via pipelines, high-pressure cylinders and cryogenic tanks—are expensive. When built as standalone facilities for individual projects, distribution and storage costs can be up to three times the cost of production, compared with shared infrastructure.

According to IEEFA, the sector needs clear demand-side signals to move forward. Measures such as green hydrogen purchase obligations, a globally accepted emissions accounting framework, and the creation of large, shared hydrogen hubs could help bridge the gap between ambition and execution.