India’s Green Hydrogen Sector Targets US$180–200 Billion Investment by 2030 Amid Cost and Infrastructure Challenges

CARE ESG Ratings highlights the gap between India’s 5 MMT production target and current deployment, with costs, infrastructure and project execution remaining key hurdles

India’s green hydrogen sector could attract US$180–200 billion in investment through 2030, as the country seeks to develop low-carbon industrial value chains and reduce emissions in hard-to-abate sectors. A new analysis by CARE ESG Ratings Limited identifies high production costs, limited commissioned capacity, infrastructure gaps and evolving certification requirements as major challenges to achieving India’s green hydrogen ambitions.

Green Hydrogen Gains Strategic Importance

According to CARE ESG Ratings’ report, Why Green Hydrogen Is Becoming an Industrial Strategy Question, green hydrogen is becoming increasingly relevant to India’s industrial competitiveness, energy security and export potential. Its potential applications include steel, fertilisers, refining and chemicals, where reducing emissions through direct electrification can be difficult.

The European Union’s Carbon Border Adjustment Mechanism (CBAM) is adding to the pressure on carbon-intensive industries. The report estimates that Indian steel exporters could face carbon-related costs of US$70–190 per metric tonne on EU-bound shipments, potentially exceeding US$270 per metric tonne when default emissions values apply.

These estimates highlight the growing importance of emissions intensity in determining the competitiveness of Indian industrial exports.

Nikunj Dube, Chief Ratings Officer, CareEdge-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.”

Production Costs Remain a Major Barrier

Green hydrogen currently costs approximately ₹350–450 per kg in India, compared with ₹160–200 per kg for conventional grey hydrogen. Production costs could fall to around US$2.4 per kg by 2030 as renewable electricity becomes more competitive, electrolyser costs decline and projects achieve greater scale.

Until costs become more competitive, adoption is likely to depend partly on policy support, carbon pricing and assured industrial demand.

Fertilisers and Steel Could Drive Demand

India’s fertiliser industry represents a potential near-term market for green hydrogen through green ammonia production. The country consumes approximately 17–19 million metric tonnes of ammonia annually, primarily produced using natural gas.

Substituting green ammonia for conventional production could help reduce dependence on fossil-fuel imports and lower 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 the 13 off-takers demonstrate that competitive price discovery alone does not guarantee project implementation.

Steel is another important sector for hydrogen-based decarbonisation. 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 the sector’s emissions intensity will become increasingly important as carbon-related trade requirements evolve.

Deployment Trails the 2030 Target

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 green hydrogen production by 2030.

However, only around 8,000 tonnes per year of production capacity had been commissioned in India by February 2026. Meeting the national target will therefore require a substantial acceleration in project implementation.

The global project pipeline faces a similar challenge. Announced low-emissions hydrogen projects could provide 27 million tonnes per annum (Mtpa) of production capacity by 2030. Yet operational projects, projects under construction and those that have reached a final investment decision or have a strong likelihood of commissioning account for only slightly more than 6 Mtpa.

According to the report, financing, infrastructure development and long-term offtake agreements will be essential to narrowing the gap between announced capacity and actual production.

Corporate Commitments and Infrastructure Investment

Corporate announcements indicate growing interest in India’s green hydrogen value chain.

• Reliance Industries: Has announced an investment of ₹75,000 crore in a vertically integrated green energy ecosystem.
• Adani Enterprises: Has stated an investment commitment exceeding US$50 billion over the next decade for green hydrogen.
• NTPC: Has proposed a green hydrogen hub in Andhra Pradesh.

Actual deployment will depend on financial closure, assured demand and commercially viable operating models.

Beyond production facilities, scaling the sector will require investment in hydrogen storage, distribution pipelines, port infrastructure and related logistics. Dependence on imported electrolyser components, including membranes, catalysts and stacks, also highlights the need to develop domestic manufacturing capabilities.

Certification and International Market Access

India’s Green Hydrogen Certification Scheme, introduced in 2025, provides a framework for traceability. Further alignment with international requirements for renewable electricity sourcing and emissions verification will be important for accessing export markets.

Consistent certification standards can help demonstrate the environmental attributes of hydrogen production and support cross-border trade. Policy continuity will also be important as companies make long-term investments in production assets, renewable energy, equipment and infrastructure.

Execution Will Shape Industrial Competitiveness

CARE ESG Ratings concludes that green hydrogen can contribute to decarbonising industries where direct electrification is difficult. However, achieving India’s ambitions will require progress across several areas, including production costs, project implementation, infrastructure development and certification.

Bridging the gap between announced investment commitments and operational capacity will be critical to establishing commercially viable hydrogen value chains and supporting India’s industrial competitiveness.