The adoption of the National Green Hydrogen Mission (NHGM) in January 2023 has catalyzed India’s green hydrogen (H₂) industry, states a new briefing note by the Institute for Energy Economics and Financial Analysis (IEEFA). Backed by a budgeted outlay of INR197 B ($2.2 B), the mission aims to produce 5 metric MMtpy of green H₂ by 2030.

As a clean, sustainable, versatile fuel and a chemical feedstock, green H₂ has the potential to decarbonize hard-to-abate industries and drive new sustainable applications in sectors such as fertilizer manufacturing, shipping and aviation.

As of August 2025, 158 green H₂ projects were at various stages of development. Approximately 94% (~11.2 MMtpy) of the total H₂ hydrogen capacity has been announced, with other details yet to be finalized. Approximately 0.1% (9,770 tpy) is under construction, and 2.8% (0.3 MMtpy) was operational as of August 2025, the note highlights.

“Although the announced capacity is nearly 2.4 times the government’s target—reflecting strong investor interest in India’s green H₂ story—there are concerns about how much of this capacity will materialize, given the challenges surrounding its adoption and uptake,” says Charith Konda, Energy Specialist at IEEFA and one of the authors.

While green H₂ is a promising fuel for decarbonizing several sectors, the industry is facing headwinds in several countries due to high production costs and demand uncertainty. Evolving definitions of what constitutes green or low-emissions H₂ across countries is also affecting the development of green H₂ as a globally tradeable commodity.

Green H₂’s ability to serve as a versatile fuel and a facilitator of decarbonization in hard-to-abate sectors also depends on the development of infrastructure, including electricity transmission and distribution grids, electrolyzers, storage tanks, and pipelines. “In India, it is easier to transmit electricity rather than hydrogen, given that the country already has a well-spread-out transmission and distribution grid,” says Konda.

“The demand for green H₂ and its derivatives is expected to come from three sources: replacing existing grey hydrogen uses, new applications in hard-to-abate sectors, and exports,” says Kaira Rakheja, Energy Analyst at IEEFA and a co-author of the note. According to government estimates, replacing the full gray H₂ current demand in oil refining and the manufacturing of fertilizers could result in a demand of 5 MMtpy.

According to industry estimates, India’s total H₂ demand could reach 15 metric MMtpy–20 metric MMtpy by 2030. With the government targeting 5 MMtpy of green H₂ production, approximately 25%–33% of this demand could be met through green H₂. Moreover, industry projections suggest that green H₂ demand could be increased further—reaching 4.08 MMtpy–6.57 MMtpy—if supported by robust policy frameworks that unlock new applications across steel, transportation, chemicals, and export markets.

The note also suggests developing a globally accepted emissions accounting framework to unlock international H₂ trade. The International Energy Agency’s proposed ‘hydrogen product passport’ with emissions intensity data could support interoperability and transparency.

Domestically, H₂ purchase obligations could create sustained demand by requiring industries to source a portion of their energy from green H₂. Developing H₂ hubs can further accelerate deployment by co-locating production, storage, and end-use, cutting costs and enabling shared infrastructure.

“While policy nudges and high-level decarbonization goals will likely drive the demand for green hydrogen, sustained demand generation in the long term will require global collaboration and concrete steps towards the domestic adoption of green hydrogen,” emphasizes Konda.