Green hydrogen can’t wait: Why India must act now to lead the clean energy future

Green hydrogen is no longer just a buzzword in climate circles or policy summits. For India, it represents a trillion-rupee economic opportunity, a strategic energy buffer, and a tool to decarbonise sectors where renewables alone cannot go. Yet, as with every game-changing transformation, the transition to a green hydrogen economy faces hard questions around costs, scale, and execution speed. The country is at a crucial inflection point—and how it navigates this decade will shape its global energy standing for decades to come.

According to recent industry analysis, India’s green hydrogen ecosystem could abate up to 50 million tonnes of greenhouse gas emissions annually and replace 80% of the nation’s fossil-based energy consumption in key industrial processes. That’s not a marginal shift—it’s a full-blown overhaul of how India moves, manufactures, and feeds its economy.

A ₹10 lakh crore opportunity waiting to be unlocked

Green Hydrogen as a Strategic and Economic Game-Changer

The National Green Hydrogen Mission, launched in January 2023, sets the tone for this transformation. With an outlay of ₹19,744 crore, the mission aims to position India as a global hub for green hydrogen production, usage, and export. Already, tenders floated by SECI (Solar Energy Corporation of India) for electrolyser manufacturing and green hydrogen production have seen strong responses. But the investment appetite goes far beyond the PLI schemes. Analysts project a potential ₹10 lakh crore investment across the green hydrogen value chain over the next two decades.

Industrial Demand Driving the Green Hydrogen Push

At the core of this surge is industrial demand. India’s fertiliser, refinery, petrochemical, and steel sectors consume around 6 million tonnes of hydrogen annually—almost entirely grey hydrogen made using natural gas. Replacing even a portion of this with green hydrogen—produced by splitting water using renewable electricity—would significantly reduce carbon emissions and import dependency.

The impact doesn’t stop there. As electrolyser prices fall and power from renewables gets cheaper, green hydrogen can power long-haul transport, shipping, aviation, and even serve as an energy storage medium to balance grid loads. When converted to green ammonia—a safer and cheaper compound to store and ship—it opens doors for large-scale exports, especially to Europe and East Asia, where demand is rising fast.

Why cost and scale remain key hurdles

Despite its vast promise, green hydrogen still struggles to compete on cost with fossil-based alternatives. At present, it is roughly twice as expensive as grey hydrogen, mainly due to high capital costs, the price of renewable energy, and the infancy of electrolyser manufacturing. Project economics can be dramatically improved if the government ensures GST relief on project components, waives open access and banking charges, and supports FDRE (firm and dispatchable renewable energy) supply to enable round-the-clock operations.

Electrolyser efficiency and technology also matter. India has already awarded 3 GW of electrolyser capacity under PLI tranches, and further improvements in stack design, material innovation, and mass manufacturing could bring costs down to globally competitive levels. Reducing reliance on rare and expensive catalysts like iridium and platinum, for instance, would go a long way in achieving localisation goals.

Crucially, there is a need to rethink transport and storage infrastructure. Setting up bunkering stations near ports, creating dedicated hydrogen corridors for industrial clusters, and integrating hydrogen into city gas distribution networks are all essential moves. Without these, green hydrogen will remain stranded potential—technologically sound, but commercially disconnected.

The case for a strong domestic and export market

India’s domestic policy frameworks, while strong on intent, must now move from incentives to implementation. States such as Gujarat, Maharashtra, Rajasthan, and Odisha have notified their own green hydrogen policies offering wheeling charge exemptions, land incentives, and white category clearances. These must now be harmonised with central schemes to ensure project viability and avoid regulatory overlaps.

At the same time, the export market offers a compelling case for long-term scale. Several global buyers—from Japan to Germany—are signing long-term contracts for green ammonia supplies, and India is well-positioned to meet this demand. Strategic partnerships are already emerging. Deals have been inked to supply green ammonia from India to Japan, to deploy hydrogen microgrids in Ladakh, and to establish port-based hydrogen storage facilities by 2035. If these are executed on time, India could not only decarbonise its own economy but become a clean energy exporter to the world.

Policy certainty and investor confidence must go hand in hand

What India needs now is execution discipline. Investors are watching policy signals closely—especially on open access for RE, duty waivers, carbon pricing, and domestic content mandates. A single-window clearance portal under MNRE has been proposed and must be operationalised quickly. Without regulatory speed and infrastructure synchronisation, the sector risks delay and capital flight.

It is also time to look at financing tools tailored to green hydrogen. Structured debt, blended finance, and carbon trading mechanisms can make large projects bankable. Unlike utility-scale solar or wind, green hydrogen will require patient capital and risk guarantees, particularly for export-oriented infrastructure. Multilateral banks, sovereign green funds, and ESG-aligned private equity all have a role to play here.

A make-or-break decade for India’s clean energy leadership

Green hydrogen is India’s chance to leapfrog from being an energy importer to a global clean energy innovator. But for that to happen, the vision must be matched with scale, speed, and state support. This is not just about replacing one molecule with another—it’s about reimagining our energy systems from the ground up.

India has the renewables, the market, the manpower, and the manufacturing potential. What it needs is policy precision, supply chain focus, and infrastructure readiness. If done right, green hydrogen could do for India what IT did in the 1990s—open a new chapter in global competitiveness and leadership.

This moment will not last forever. Green hydrogen can’t wait.