India's Emerging Green Hydrogen Transition

Through its National Green Hydrogen Mission (NGHM), India aims to secure a leading global position in the green hydrogen sector. The goal is to produce at least five million metric tonnes of hydrogen annually by 2030, primarily for export, with the potential to scale up to 10 million metric tonnes, while supplying approximately ten per cent of the global green hydrogen market. To achieve this, over two billion US dollars have been allocated to ramp up commercial hydrogen production.

Several private companies are also investing in the technology; Reliance Industries, for example, aims to reduce the cost of green hydrogen to below one US dollar per kilogram within a decade. The company reportedly plans to invest ten billion US dollars in manufacturing capacity, including electrolysers. Similarly, the ACME Group has already launched a pilot plant in Bikaner (Rajasthan), while companies such as NTPC are planning production hubs in regions like Andhra Pradesh, primarily for the export of derivatives such as green ammonia and methanol.

However, Dwarkeshwar Dutt notes that green hydrogen is not intended solely for export; it could also play a vital role in fertiliser production, thereby strengthening domestic resilience. This is critical as India is doubly dependent on imports of both nitrogen fertilisers and natural gas. Geopolitically driven price spikes and supply chain disruptions directly impact fertiliser costs and supply stability. Domestically produced green hydrogen could replace imported natural gas and significantly strengthen food security. 

Global markets and “hydrogen diplomacy”

India is positioning itself as a low-cost exporter for traditionally energy-importing regions, such as the EU, Japan, and South Korea. The Free Trade Agreement (FTA) between India and the EU, finalised in January 2026, is intended to improve market access and trigger investments of approximately ten billion US dollars. A German-Indian project aims to transform the port of Mulapeta into a global hub for green hydrogen and clean ammonia by 2029. Additionally, closer cooperation with Japan on research and development is expected to reduce electrolyser costs.

A key conclusion of Dutt’s study is that decarbonisation is no longer being driven solely by ecological concerns, but is increasingly motivated by a desire for greater energy security. The author argues that geopolitical shocks, such as the wars in Ukraine and Iran, are accelerating the energy transition. These crises underscore the inextricable link between energy security and the expansion of renewable energy and the development of new technologies such as hydrogen.

Dutt sees significant potential for strategic cooperation between the European Union and India: while the “Global North” seeks to secure its energy supply through imports, the “Global South” can use large-scale investment in sustainable energy technologies to expand its own capacity and promote economic development. 

Industrial decarbonisation and CBAM

The EU’s Carbon Border Adjustment Mechanism (CBAM), which has mandated compensatory payments since January 2026, is forcing Indian exporters, particularly in the steel industry, to decarbonise to remain competitive, with green hydrogen to play a central role in substituting coal and natural gas. Companies such as Jindal Steel, Tata Steel, and JSW Energy have already implemented initial plants or transport solutions.

Despite initial successes, structural hurdles remain. Production costs currently remain significantly higher than for conventional (grey) hydrogen. Large-scale renewable energy projects often lead to land-use conflicts with local communities, and because electrolysis is water-intensive, it poses a risk to food and drinking water security in the water-stressed nation. The lack of a dedicated pipeline network, coupled with a substantial gap in electrolyser capacity, presents a major hurdle: to meet the goal of at least five million tonnes, 55 to 65 gigawatts are required, yet only around one gigawatt had been installed by September 2025. 

Policy recommendations

Dutt identifies four key policy measures to support India’s green hydrogen transition:

1. Provide adequate financial support: Increase direct financial support, such as capital subsidies (particularly in the early stages), and provide low-interest financing through multilateral development banks, as well as offering tax incentives and waiving interstate transmission charges.
2. Streamline regulations: Introduce fast-track mechanisms and single-window clearance portals for project approvals.
3. Build a robust R&D and infrastructure ecosystem: Foster strong partnerships between industry, government, and academia, and develop efficient supply chains, including pipelines, tankers, intermediate storage, and distribution networks.
4. Focus on demand-side interventions: Mandate the use of green hydrogen in key sectors, such as fertiliser production and oil refining. 

Further information:
This RIFS Discussion Paper is part of a series edited by Yana Zabanova and Rainer Quitzow on the geopolitics of hydrogen. The series, including two edited volumes, comprises case studies from Europe and major economies around the world, including Brazil and China. 

Publication:
Dutt, Dwarkeshwar: India's Emerging Green Hydrogen Transition: Ambitions, Barriers and Policy Directions. RIFS Discussion Paper, June 2026.