India’s Green Hydrogen Sector Eyes US$ 180-200 Billion Investment through 2030 as Cost and Infrastructure Challenges Persist

India targets 5 million metric tonnes of annual Green Hydrogen production by 2030

Mumbai, October 27, 2026: According to a new analysis by CARE ESG Ratings Limited Green Hydrogen is emerging as a strategic priority for India’s industrial competitiveness and decarbonisation, with growing implications for sectors such as steel, fertilisers, refining and chemicals. However, high production costs, limited commissioned capacity, infrastructure gaps and evolving international certification requirements remain significant barriers to large-scale adoption, The report, Why Green Hydrogen Is Becoming an Industrial Strategy Question, highlights that the transition to green hydrogen is no longer driven solely by climate commitments. Increasingly, it is also linked to export competitiveness, energy security and India’s ability to establish itself as a competitive producer of low-carbon industrial materials.

The urgency is reinforced by the European Union’s Carbon Border Adjustment Mechanism (CBAM), which introduces carbon-linked costs for imports of carbon-intensive products. According to the report, Indian steel exporters could face estimated costs of $70–190 per metric tonne on EU-bound shipments, potentially exceeding $270 per metric tonne where default emissions values apply. These estimates underscore the growing economic implications of carbon intensity for Indian exporters.

According to Nikunj Dube, Chief Ratings Office, CareEedge– ESG said, ““India’s green hydrogen ambitions must translate into commercially viable projects, supported by reliable offtake agreements, competitive production costs and robust infrastructure. Effective execution will determine the pace of adoption, while opportunities extend across the value chain, from electrolyser manufacturing and renewable energy to storage, transportation and end-use applications.”

Cost competitiveness remains the biggest hurdle

Green hydrogen currently costs approximately ₹350–450 per kg, compared with ₹160–200 per kg for conventional grey hydrogen. Costs could decline to around US$2.4 per kg by 2030 as renewable electricity becomes more competitive, electrolyser costs fall and projects scale up. Until then, adoption will depend partly on policy support, carbon pricing and assured industrial demand.

Fertilisers and steel are critical demand drivers. India consumes approximately 17–19 million metric tonnes of ammonia annually, primarily produced using natural gas. Green ammonia could reduce fossil-fuel import dependence and emissions. An August 2025 Solar Energy Corporation of India auction discovered a benchmark bid price of ₹49.75 per kg; however, execution challenges and the withdrawal of two of 13 offtakers highlight the limits of price discovery alone.

India produced approximately 164.9 million metric tonnes of steel in 2025, according to provisional figures cited in the report, making it the world’s second-largest steel producer. Reducing emissions intensity will become increasingly important as carbon-related trade requirements evolve.

Deployment lags behind ambitions

Launched in January 2023 with an outlay of ₹19,744 crore, the National Green Hydrogen Mission targets at least 5 million metric tonnes of annual production by 2030. Yet, only around 8,000 tonnes per year of production capacity had been commissioned in India by February 2026.

Globally, announced low-emissions hydrogen projects could deliver 27 million tonnes per annum (Mtpa) by 2030, but operational projects, those under construction and those at final investment decision or with a strong likelihood of commissioning account for only slightly more than 6 Mtpa. Financing, infrastructure and long-term offtake agreements will be essential to closing this gap.

Investment, infrastructure and certification

Corporate commitments signal growing interest. Reliance Industries has announced ₹75,000 crore for a vertically integrated green energy ecosystem, Adani Enterprises has stated an investment commitment exceeding US$50 billion over the next decade for green hydrogen, and NTPC has proposed a green hydrogen hub in Andhra Pradesh. Actual deployment will depend on financial closure, assured demand and viable operating models.

Scaling the sector will also require storage, pipelines, port infrastructure and reliable offtake. India’s Green Hydrogen Certification Scheme, introduced in 2025, provides a framework for traceability; alignment with international standards on renewable electricity sourcing and emissions verification will support export access. Dependence on imported electrolyser components, including membranes, catalysts and stacks, further underscores the need for domestic manufacturing and policy continuity.

The report concludes that green hydrogen can help decarbonise industries where direct electrification is difficult. Bridging the gap between investment commitments and operational capacity, while improving costs and infrastructure, will be critical to India’s industrial competitiveness.

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)

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