India eyes becoming a green hydrogen superpower, can US$92 billion get it there?

India eyes becoming a green hydrogen superpower, can US$92 billion get it there?

India is on a mission to create half a million jobs and slash its reliance on fossil fuel imports. But it still has some hurdles to clear

With billions in investments planned and a swelling roster of corporate partnerships, India’s green hydrogen drive is gathering momentum.

But can the country overcome the economic and technical hurdles standing in its way?

Shripad Naik, minister of state for power and new and renewable energy, at a business conference in New Delhi last week, declared :

We want to make India not only a major producer but also a global hub for green hydrogen export,

Under its National Green Hydrogen Mission, launched in 2023, India aims to capture 10 per cent of the world market and produce 5 million tonnes of the fuel annually by 2030.

The programme also envisages nearly US$92 billion in investment, the creation of half a million jobs and a reduction of US$11 billion in fossil fuel imports – plus a cut of 50 million tonnes of carbon emissions each year.

Naik said that progress was already visible: contracts for 862,000 tonnes of production capacity had been awarded to 19 companies, alongside 3,000 megawatts of electrolyser manufacturing capacity to 15 companies since the mission’s launch.

The push stems in part from India’s reliance on crude oil imports, which have long strained its foreign exchange reserves. Unlike hydrogen produced from fossil fuels, green hydrogen is generated by splitting water into hydrogen and oxygen using electrolysers powered by renewable energy.

Anjal Prakash, research director at the Indian School of Business’ Bharti Institute of Public Policy, said :

India has ambitious goals to realise its green energy potential and reduce fossil fuel imports,

“The pace depends on factors like investment, technology, and policy support.”

There are signs the economics of the mission are shifting in India’s favour.

An EY report published last week projected the cost of producing green hydrogen in the country would fall by about 40 per cent to between US$3 and US$3.75 per kilogram by 2030, driven by lower transmission charges, taxes and electrolyser costs.

Globally, the hydrogen market is forecast to grow from US$8.8 billion in 2024 to nearly US$200 billion by 2034. India’s exports of green hydrogen could reach US$3 billion to US$5 billion annually over the next decade, with strong demand expected from the European Union, Japan and South Korea, according to the report.

Indian companies are increasingly partnering with foreign firms to tap those opportunities.

In May, Hyderabad-based Juno Joule Green Energy signed a US$1.3 billion agreement with Germany’s Select Energy to build a green hydrogen and ammonia export facility in Andhra Pradesh state.

In June, US electrolyser manufacturer Ohmium International and Toyota Kirloskar Motor, a joint venture between Toyota Motor Corporation and India’s Kirloskar Group, agreed to develop small-scale green hydrogen-based power grids in the South Asian nation.

Industrial giants Adani Group and Reliance Industries have also unveiled multibillion-dollar investment plans for green hydrogen production facilities across the country.

But analysts warn of bottlenecks in grid infrastructure, high energy storage costs, land acquisition hurdles and the need for further advances in electrolysis technology.

Prakash said,

Policy and regulatory frameworks are still evolving, creating uncertainty for investors,

“Overcoming these obstacles is crucial for green hydrogen to become a viable and competitive energy carrier.”

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