Despite a strong investor interest in India’s green hydrogen story, there are concerns about how much of this capacity will materialise, given the challenges surrounding its adoption and uptake, finds an analysis.
The analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) finds that as of August 2025, 158 green hydrogen projects were at various stages of development. Approximately 94% of the total green hydrogen capacity has been announced, with other details yet to be finalised. Approximately 0.1% is under construction, and 2.8% was operational as of August 2025.
Primary barriers include a lack of committed buyers, high production costs, varying global definitions of green hydrogen, and inadequate infrastructure — particularly for storage, transportation, and shared facilities.
According to industry estimates, India’s total hydrogen demand could reach 15–20 million metric tonnes per annum (MMTPA) by 2030. Green hydrogen demand could reach 4.08-6.57MMTPA if supportive policies are adopted to drive new sectoral applications in steel, transportation, chemicals, and exports.
The adoption of the National Green Hydrogen Mission (NHGM) in January 2023 has catalysed India’s green hydrogen industry. Backed by a budgeted outlay of Rs 197 billion, the mission aims to produce five MMTPA of green hydrogen by 2030.
While green hydrogen is a promising fuel for decarbonising 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-emission hydrogen across countries is also affecting the development of green hydrogen as a globally tradable commodity.
Green hydrogen’s ability to serve as a versatile fuel and a facilitator of decarbonisation in hard-to-abate sectors also depends on the development of infrastructure, including electricity transmission and distribution grids, electrolysers, 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 Charith Konda, Energy Specialist at IEEFA and one of the authors.
Domestically, hydrogen purchase obligations could create sustained demand by requiring industries to source a portion of their energy from green hydrogen. Developing hydrogen 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 decarbonisation 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,” emphasises Konda.
