India’s ambition to establish itself as a global hub for green hydrogen production, consumption, and exports is encountering major hurdles due to high production costs, infrastructure bottlenecks, and uncertain domestic demand. Launched in January 2023, the government’s National Green Hydrogen Mission (NGHM) set a target of achieving at least 5 million tonnes (Mt) of annual green hydrogen production by 2030. However, official records show that by December 2025, awarded government incentives covered only 0.862 million tonnes per annum (MTPA) of production capacity—representing just 17 percent of the 2030 goal—alongside 3,000 MW per annum of electrolyzer manufacturing capacity.
Green hydrogen is produced by splitting water using renewable energy, distinguishing it from grey hydrogen, which is derived from natural gas and releases significant carbon dioxide emissions. Beyond reducing emissions, green hydrogen can replace grey hydrogen in fertilizers and refineries, replace coal in steelmaking, and substitute for fossil fuels in parts of the chemical, petrochemical, and heavy transport sectors, including shipping. Large-scale adoption can also lower dependence on imported fossil fuels and industrial feedstocks, limit exposure to global price volatility, and strengthen national energy security, though success will ultimately depend on costs, end-use efficiency, and supporting infrastructure.
High cost remains a primary barrier to widespread domestic adoption, a concern highlighted by the International Energy Agency (IEA). In a recent report, the IEA noted that slow infrastructure development, project delays, and uncertain demand make it unlikely that green hydrogen will become cheaper than grey alternatives in the near future. Under NGHM, 174,900 million Indian rupees have been allocated to the Strategic Interventions for Green Hydrogen Transition (SIGHT) program to provide temporary subsidies. These declining three-year production subsidies cover green hydrogen (dropping from 50 rupees to 30 rupees per kg) and green ammonia (dropping from 8.8 rupees to 5.3 rupees per kg), offsetting only 10 to 15 percent of the green-to-grey cost gap. Electrolyzer manufacturing incentives are spread over five years, declining from 4,440 rupees to 1,480 rupees per kW.
To coordinate production, storage, handling, and shipping for potential exports, the government designated Deendayal, V.O. Chidambaranar, and Paradip as official green hydrogen port hubs. However, the geographic distance between renewable energy generation centers and hydrogen ports poses significant logistical issues. For instance, Kandla port (Deendayal) sits relatively close to renewable-rich clusters in Gujarat and Rajasthan, whereas Paradip port is located considerably farther from major generation centers. Transporting pure green hydrogen over long distances involves high compression costs (200 to 700 bar) or expensive liquefaction (-253 degrees Celsius).
A potentially more viable option is to convert green hydrogen into derivatives at the source and transport them through existing infrastructure. Decentralized use by nearby refineries and fertilizer plants, preferably through blended natural gas pipelines, with only surplus production exported as ammonia, could further avoid the cost of transporting pure hydrogen. Because renewable power accounts for 50 to 70 percent of production costs—particularly when round-the-clock supply is required—the government notified a waiver of Inter-State Transmission System (ISTS) charges for eligible projects to encourage domestic adoption and boost export competitiveness.
According to WITS data, India imported hydrogen worth $871,700 in 2024, compared to exports of just $17,400. Nigeria served as the largest export destination, accounting for 45.8 percent of Indian hydrogen exports, followed by Nepal, Bangladesh, Bhutan, and Sri Lanka. While estimates suggest the European Union and East Asia could together import 3.4 to 6 million tonnes of green hydrogen annually by 2030—figures that understate the market by excluding trade in derivatives and electricity sourcing distinctions—India is actively building international trade links. In July 2026, ACME Group (holding a 0.4 MTPA allocation under NGHM) signed long-term supply agreements with Japanese partners from its Paradip facility, securing deals for 0.41 MTPA of green ammonia for IHI and 1.0 MTPA of green methanol for Mitsubishi Gas Chemical. India has also pursued hydrogen cooperation and export-infrastructure partnerships with Germany and other countries.
Despite India’s substantial renewable energy potential, the economics of large-scale green hydrogen production will depend on land and water availability, as well as the generation costs of renewable energy and electrolyzers. Water-stressed locations will need credible sourcing and treatment plans, including desalination where necessary. Furthermore, reliance on global supply chains for electrolyzers and renewable power equipment leaves production exposed to concentrated manufacturing and critical mineral dependencies. International export markets also bring strict compliance requirements, such as European Union rules for renewable fuels of non-biological origin (RFNBO), which mandate verified renewable energy sourcing, certification, product traceability, safe port operations, and reliable delivery.
Long-term sustainability will require policy measures beyond short-term subsidies, including establishing a Green Hydrogen Production Obligation to create demand in consuming industries, expanding domestic electrolyzer manufacturing through performance-linked incentives, introducing carbon pricing for grey hydrogen, and targeting low-hanging applications where hydrogen is already in use. While exports can earn foreign exchange, lower fossil fuel import bills, and help projects achieve economies of scale, India's exports must reinforce—not distract from—the domestic transition. Success will depend on competitive low-emissions production, replacing fossil-based inputs at home, securing reliable export buyers, and delivering measurable emissions reductions.
Originally published under Creative Commons by 360info ™.
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