By: Bharat Goenka
Last updated : February 26, 2026 7:17 am
Governments, both at the central and state levels, have taken a sharply focused approach, and this has resulted in meaningful production-linked incentives
Developing a robust and scalable ‘Green Hydrogen Technology Ecosystem’ in India is emerging as a critical pillar in realising the world’s fastest-growing economy’s dream of achieving energy independence by 2047. But realising this vision requires a tightly coordinated, multi-stakeholder approach that brings together technology innovation, industrial strategy, infrastructure development, regulatory clarity, and capital markets into one shared national ambition.
Ambitious Renewable Energy Push
As the world’s fourth-largest economy aims to achieve the net zero emission target by 20702, it is primarily betting on harnessing wind, solar, nuclear, and other renewable sources of energy to cut emissions. In the process, the country aims to increase the renewable power capacity to 500 GW by 2030, including 280 GW of solar and 100 GW of wind capacity, while unlocking investment opportunities worth around $500 billion.
To give a further push to its green economy, the South Asian nation has articulated one of the world’s most ambitious targets of achieving five million tonnes of annual green hydrogen production capacity by 20303, supported by around 125 gigawatts (GW) of renewable energy.
India’s Green Hydrogen ambition also envisages leveraging its over 11,000 km-long coastline and its well-developed port network port network. Accordingly, the country has charted a detailed plan to develop a port-led green molecules economy, in which coastal hubs will supply green hydrogen and ammonia primarily for exports, along with domestic consumption.
Government’s Green Energy Push
India is also among very few countries in the world where both the central and state governments have announced production-linked incentive schemes and targeted subsidies to accelerate the adoption of green molecules in the country.
To provide a strong policy impetus to the green economy and support the growth of the adoption of green hydrogen and ammonia, the world’s most populous nation has launched the National Green Hydrogen Mission (NGHM) and Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, supported by targeted incentives, coastal infrastructure development, and waste-to-energy potential, with a combined budgetary outlay of $2.1 billion.
These programmes, combined with Solar Energy Corporation of India Limited (SECI) support and various state-level CAPEX incentives, are expected to accelerate domestic electrolyser manufacturing, lower project costs, and streamline large-scale investment across the value chain.
To catalyse the green economy in the country, governments, both at the central and state levels, have taken a sharply focused approach, and this has resulted in meaningful production-linked incentives – starting with direct financial support of about $53 per kilowatt for electrolyser manufacturing, with a calibrated tapering over five years.
Besides this, the central government is also providing an incentive of $0.6 per kg for the first year, which will gradually reduce to $0.37 per kg over the next three years. The government is giving an additional incentive to produce green ammonia of up to $106 per tonne, which will taper in subsequent years.
Additionally, aligning with the national vision, states such as Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu and Kerala are offering 100 per cent electricity duty waivers and substantial relief on transmission and wheeling charges.
Uttar Pradesh has gone a step further with complete waivers on electricity duty as well as transmission and wheeling charges, in addition to capital subsidies of up to 35 per cent.
Kerala, too, is supporting projects through capital grants of up to Rs. 20 crore per project. Together, this centre–state policy alignment significantly improves project economics and builds confidence for investors across the value chain.
Besides providing cash incentives and tax benefits, the government has also identified key sectors—including steel, fertilisers, refineries, transportation and energy storage for green hydrogen deployment—and has sanctioned several pilot projects under the mission across the steel, mobility and maritime sectors, an EY report said.
Challenges and opportunities
Despite presenting tremendous opportunities, India’s effort to develop a scalable Green Hydrogen technology ecosystem is not without its share of challenges, including high capital costs, limited infrastructure for storage and transportation, technology dependencies for critical electrolyser components, and water resource constraints in renewable-rich regions.
The cyclic nature of renewable energy remains the biggest bottleneck to scaling up Green Hydrogen production capacity in the country. India, over the past few years, has made significant investments in ramping up renewable power generation capacity, but grid constraints continue to limit the reliable and affordable power supply needed for large projects.
Going forward, India will need 60–80 GW4 of renewable power by 2030, yet transmission and connectivity timelines are already slipping beyond that horizon. To overcome the grid challenge, India needs to invest heavily in setting up a strong transmission network, enabling hydrogen plants to be developed anywhere in the country without being constrained by grid co-location.
Harnessing waste-to-energy presents another unique opportunity for India to scale up the production of the green molecule, as the country produces nearly 62 million tonnes of municipal solid waste annually and has a surplus of around 230 million metric tonnes of agricultural biomass.
If efficiently aggregated and organised at industrial scales, these resources can serve as a feedstock base to produce around 20 million tonnes of green hydrogen per year.
Conclusion
To develop a robust and economically viable Green Hydrogen Technology Ecosystem in India, there is a need for close collaboration across sectors—uniting policymakers, industry participants from agile startups to global leaders, and long-term investors. And if the country is able to get this alignment right, green hydrogen will go a long way in supporting India’s climate commitments, enhancing industrial competitiveness and reinforcing the nation’s energy security.