Ambitious targets collide with high costs and weak demand signals

India’s flagship National Green Hydrogen Mission, once pitched as a cornerstone of the country’s clean-energy transition, is losing momentum as most planned projects fail to move beyond announcements. A new analysis by an international energy think tank finds that roughly 94% of proposed green hydrogen capacity remains at an early stage, held back by unclear demand, insufficient infrastructure and costs that remain well above fossil-fuel alternatives. That gap between political ambition and commercial reality is raising questions over whether India can reach its target of producing 5 million tonnes of green hydrogen a year by 2030.

Developers have unveiled dozens of large projects tied to renewable power, electrolysers and industrial offtakers, from fertiliser plants to refineries and steel producers. Yet many of those potential customers are hesitant to sign long-term purchase agreements without clearer price guarantees or government support. Green hydrogen currently costs significantly more than hydrogen derived from natural gas or coal, and the pipelines, storage facilities and port infrastructure needed to move it at scale are still in their infancy. Investors remain interested, but are increasingly cautious about timelines and policy risk.

Policy incentives, regional pilots and the politics of coal

New Delhi has offered subsidies, tax incentives and pilot schemes to jumpstart demand, but officials privately concede that the pace is slower than expected. Several state governments are competing to host industrial hubs, promising land, grid access and local incentives. Ports along India’s west and east coasts are studying how to handle exports of green ammonia and other hydrogen-derived fuels. Even so, the report warns that without targeted incentives for early adopters in sectors like fertilisers, shipping and heavy industry, much of the announced capacity may never see construction.

The struggle comes as India is also expanding coal-based power to meet surging electricity demand, sending mixed signals to both domestic and foreign investors. Supporters of green hydrogen argue that early investment is essential if India wants to secure a piece of future export markets in Europe and East Asia. Critics counter that public money would be better spent on proven technologies such as solar, wind and grid upgrades. The coming years will likely determine whether India becomes a leader in green hydrogen or watches from the sidelines as others define the rules of a future low-carbon fuel trade.