India’s green hydrogen journey has reached a decisive moment. Not because the country lacks ambition, but because ambition on its own is no longer enough.
Over the past 18 months, India has moved with impressive speed, announcing hydrogen valleys, creating a policy framework from the ground up, launching major incentive programmes, and attracting strong interest from global developers, electrolyser manufacturers, industrial groups, and port operators. Investment proposals worth billions are already being discussed. Yet, despite this momentum, the sector is slowing.
The Ministry of New and Renewable Energy (MNRE) has indicated that the 5 MMT green hydrogen target for 2030 may be achieved slightly later than planned. Analysts note that many early-stage announcements are not progressing toward construction. Across the industry, one challenge stands out consistently: the lack of long-term, bankable demand. Behind all the progress, this is the single barrier that now needs urgent focus.
The real bottleneck is demand certainty
Green hydrogen is different from solar or wind. Renewable energy scales when supply grows. Hydrogen scales when demand is secured first. Electrolyser plants, transport pipelines, storage facilities and ammonia terminals require large upfront investments and at least 10–15 years of offtake visibility. Without that certainty, financial closure becomes difficult.
India has the world’s lowest-cost renewable power, a large industrial base, and clear strategic reasons to transition away from fossil-based hydrogen. But the market cannot expand without predictable demand:
• Investors need contracted volumes to commit capital.
• Industries need price visibility before shifting from grey hydrogen.
• Banks need clarity on long-term offtake and carbon costs before lending.
Demand does exist across steel, fertilisers, chemicals and heavy mobility, sectors that already consume significant hydrogen. But today, that demand is met by low-cost grey hydrogen. Transitioning will require a structured bridge, not just policy intent.
The world has adopted demand-first models, India should too
The most successful hydrogen economies have prioritised early demand creation:
• The EU uses Contracts for Difference to close the price gap.
• Japan and Korea sign long-term government-backed ammonia import agreements.
• The United States anchors domestic buyers through federal tax credits.
• Germany’s H2Global guarantees long-term purchases through a centralised mechanism.
These countries recognise that hydrogen markets do not grow organically, they must be built. India has so far taken a supply-led approach similar to renewables, but hydrogen is not a plug-and-play solar model. Auctions alone cannot create a viable hydrogen market. Without demand signals, MoUs will remain MoUs.
India has built a strong foundation, now it needs the next step
Even with current uncertainties, India has created one of the most promising early-stage hydrogen ecosystems globally:
• Hydrogen Valley projects are being set up to demonstrate full value chains.
• Green ammonia and electrolyser manufacturing proposals are ramping up.
• Early pilots in refineries, ports, mobility and steel clusters are underway.
• Several states, including Gujarat, Andhra Pradesh, Tamil Nadu and Rajasthan, are emerging as natural hydrogen hubs.
This forms a solid foundation. But scaling requires a structured demand architecture.
A five-point demand blueprint for India’s hydrogen market
For India to convert ambition into execution, five measures stand out:
1. Phased Green Hydrogen Blending Mandates
A gradual 5–10% blending requirement in fertilisers, refineries and petrochemicals can secure early demand while giving industry time to adjust.
2. An Indian Model of Contracts for Difference
A tailored CfD framework can bridge the cost gap with grey hydrogen, enabling the first commercial-scale projects to move forward.
3. Long-Term Ammonia Export Agreements
India is well-positioned to become a competitive green ammonia supplier. Securing 10–15-year export contracts with Japan, Korea and Europe will anchor demand and attract large investments.
4. Transition Finance for Decarbonisation
Dedicated financing products from banks and development institutions will be essential for hydrogen-linked capital expenditure, storage and transport infrastructure.
5. A National Hydrogen Infrastructure Masterplan
A coordinated plan covering pipelines, storage, port berths and bunkering hubs,0 aligned with GatiShakti, is needed to ensure seamless logistics.
India’s strength is more than cost – It is scale
Hydrogen discussions often reduce to price per kilogram. But India’s long-term advantage is far deeper: A large and diversified industrial ecosystem; abundant low-cost renewable energy; strong engineering and manufacturing capabilities; a growing domestic electrolyser industry; and a market large enough to attract global ecosystems.
If India solves demand creation intelligently, it can become a global price-setter, not just another participant in the hydrogen economy.
The next three years will shape the next decade
Global energy markets are watching India closely, not only for the scale of its future consumption but for the influence its choices may have on global hydrogen economics. If India bridges the demand gap, it could exceed its long-term goals. If it does not, other markets with stronger demand frameworks may take the lead.
Green hydrogen is a strategic opportunity for India. But opportunities do not last forever. This is the moment to move from ambition to adoption, from pilots to commercial demand, and from announcements to execution.
If India gets this right, it will not just join the global hydrogen transition, it will help define it.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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