India’s Hydrogen Policy: Opportunities and Challenges

Posted On - 17 October, 2023 • By - King Stubb & Kasiva

India is at a pivotal point in its energy transition, largely driven by escalating petroleum costs. The country’s dependence on imported crude oil and natural gas has rekindled concerns about energy security, prompting a revaluation of its reliance on fossil fuels. While India has made remarkable strides in harnessing solar and wind energy over the past decade, it is clear that renewable energy alone cannot satisfy India’s growing energy demands.

In the global pursuit of net-zero emissions, hydrogen emerges as a promising solution to help India reduce greenhouse gas emissions across various sectors. Green hydrogen, produced by electrolyzing water using renewable electricity, is leading the hydrogen revolution. However, the claim that India recognized the potential of green hydrogen as early as the 1970s and launched pioneering hydrogen technology programs then is not accurate.

The country’s focus on green hydrogen is more recent, with significant steps such as the National Green Hydrogen Mission being approved by the Union Cabinet only in January 2022. This mission aims to make India a leading producer and supplier of green hydrogen in the world. However, several challenges impede the route to building a thriving hydrogen economy, such as:

  • High technology prices
  • A lack of comprehensive government laws
  • The need to raise public awareness

In response to these challenges, recent government plans, such as the establishment of a national hydrogen energy mission, demonstrate a relentless dedication to fostering the long-term growth of green hydrogen. This article aims to highlight the opportunities and challenges concerning India’s hydrogen policy in the following manner:

  • The Promise of Hydrogen
  • India’s Hydrogen Policy
  • Opportunities in the Hydrogen Economy
  • Challenges to Implementation

The Promise of Hydrogen

In India’s journey towards sustainable energy, green hydrogen emerges as a transformative solution. Unlike traditional hydrogen production, which is linked to fossil fuels and emissions, green hydrogen is carbon-neutral and holds enormous potential across sectors crucial to India’s decarbonisation objectives. This versatile clean fuel serves as a cleaner alternative to hydrogen derived from fossil fuels, also known as ‘Grey Hydrogen’ or ‘Brown Hydrogen’, significantly reducing carbon footprints in industries such as steel and cement. It also revolutionises the transportation industry.

Offering sustainable alternatives for road, aviation, and maritime travel, green hydrogen addresses environmental concerns and showcases promise as a stable energy supply, resolving the intermittency challenge of renewable sources. In essence, it becomes a driving force in India’s transition to a resilient, low-carbon future, with applications encompassing critical industries and a clear commitment to environmental sustainability. India’s Hydrogen Policy

A comprehensive policy framework and strategic initiatives, including the Green Hydrogen Mission[1], guide India’s commitment to energy independence and attaining Net Zero by 2070. The mission, which was launched in February 2022 and revised in 2023, functions as a cornerstone for promoting green hydrogen production.

  • Incentives for Producers: The mission prioritizes connectivity to the Inter-State Transmission System (ISTS) for green hydrogen producers, with a notable provision that waives ISTS fees for 25 years on projects commissioned by December 31, 2030.[2] This not only encourages green hydrogen production but also addresses the challenge of storage by allowing distribution companies (DISCOMs) to store excess renewable energy for 30 days.[3]
  • Facilitation of Exports: Facilitation of renewable hydrogen exports is a critical aspect of the policy. By permitting port authorities to provide land for bunker storage, the government promotes domestic consumption and positions India as a potential global supplier of green hydrogen.
  • SIGHT Programme: The government introduced the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme in tandem with the Green Hydrogen Mission. This incentive emphasizes the significance of building indigenous capabilities to propel the green hydrogen ecosystem by focusing on electrolyzer manufacturing.[4]
  • Inclusion in Definitions: The Electricity Rules of 2022[5], as amended in 2023[6], include green hydrogen in the definition of “green energy” This fundamental modification enables distribution licensees, captive users, and open-access consumers to comply with the Renewable Purchase Obligation (RPO) by purchasing green hydrogen. It synchronizes regulatory frameworks with the dynamic energy landscape.
  • International Cooperation and Cutting-Edge Technology: Initiatives such as the recent 3-Day International Conference on Green Hydrogen demonstrate the proactive posture of the government. These initiatives emphasize a collaborative approach by emphasizing partnerships with the industry to develop cutting-edge green hydrogen technology.[7]

National Hydrogen Mission Outcomes by 2030

The projected outcomes for 2030 reflect the mission’s ambitious yet attainable objectives[8]:

  • Capacity Addition: Developing a green hydrogen production capacity of at least 5 MMT per year, aligned with an associated renewable energy capacity addition of approximately 125 GW in the nation.
  • Investments and Employment: Attracting over Rs. 8 lakh crores in total investments and creating over 6 lakh employment opportunities in the booming green hydrogen industry.
  • Economic and Environmental Impact: A cumulative reduction in fossil fuel imports of over Rs. One lakh crore and a reduction in annual greenhouse gas emissions of nearly 50 MMT highlight the mission’s significant environmental benefits.

Opportunities in the Hydrogen Economy

India’s hydrogen economy is growing significantly, owing to several government initiatives, bringing with it immense opportunities. For instance, the draft Inter-ministerial R&D Roadmap for Green Hydrogen Ecosystem shows that the government is prioritizing R&D to improve the efficacy, cost-effectiveness, and safety of green hydrogen technologies.[9]

Some of the rising opportunities are as follows:

  • Economic and Employment Potential: Green hydrogen promotes the decarbonization of the industrial sector, creating significant economic opportunities. Key industries, such as fertilizers, refining, transportation, etc., thus, become centers for job creation.
  • Technological Innovation: The objective of policies in this regard is to increase competitiveness, thereby spurring technological advances in the hydrogen industry. The innovative landscape of the hydrogen industry is significantly shaped by R&D, particularly in components such as electrolyzers.
  • Energy Security: Green hydrogen, derived from renewable energy at a minimal cost, ensures energy security. It also decreases reliance on conventional fossil fuels.
  • Presence in the Global Market: India can capture opportunities within the context of a low-carbon economy due to the global momentum surrounding hydrogen. A competitive green hydrogen industry can result in exports, thereby establishing India as a major player in the global hydrogen market. Low-carbon products containing hydrogen, such as green ammonia and green steel, become avenues for releasing significant manufacturing capacity.
  • Economic Growth Targets: According to economic forecasts, the value of the renewable hydrogen market will increase substantially by 2030, reaching significant figures. With its varied applications, the hydrogen economy becomes a driver of economic development, attracting investments and fostering business opportunities.

Challenges To Implementation

  • Technical Challenges: The water dependence of electrolysis in green hydrogen production poses a significant hurdle, particularly in water-scarce regions. Standardization of production methods and addressing technical challenges in storage and transportation are essential for the seamless integration of green hydrogen.
  • Economic Barriers: High production costs and capital expenditures for electrolyzer manufacturing impede the economic viability of green hydrogen. Bridging the demand-supply gap is crucial for scalability and sustained growth, necessitating a focus on cost-effectiveness.
  • Regulatory and Policy Challenges: Ambiguity surrounding Green Hydrogen Consumption Obligations creates skepticism among investors. Streamlining regulations and policies is vital for fostering clear frameworks that boost investor confidence.
  • Overall Integration and Expansion: A holistic approach is imperative for the successful integration and expansion of green hydrogen infrastructure, addressing technical, economic, and regulatory challenges. Continuous efforts in technological innovation play a pivotal role in overcoming these challenges.  


India’s pursuit of a sustainable hydrogen economy stands ready for revolutionary expansion. Despite challenges such as water dependence and economic barriers, the nation’s commitment is demonstrated by strategic initiatives such as the Green Hydrogen Mission and other supportive policies. It will be crucial to address technical obstacles, reduce costs, and clarify regulatory frameworks. India seeks to secure a leadership position in the global hydrogen landscape by focusing on technological innovation and holistic approaches, thereby fostering economic growth, sustainability, and energy independence.


u003cstrongu003eWhat is the primary focus of India’s Green Hydrogen Mission?u003c/strongu003e

The Green Hydrogen Mission focuses on promoting green hydrogen production, offering incentives, and facilitating its integration into India’s energy landscape.

What is the significance of the Green Hydrogen Policy’s 30-day storage provision?

This provision allows distribution companies to store excess renewable energy for 30 days, thereby addressing intermittency issues and assuring a stable and reliable energy supply.

u003cstrongu003eHow does the SIGHT program complement the Green Hydrogen Policy?u003c/strongu003e

The SIGHT Program functions as a supplement by incentivizing electrolyzer production, which aligns with the Green Hydrogen Policy’s goals of promoting green hydrogen production and reducing costs.










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