CEEW Study Highlights Potential INR 5 Lakh Crore Boost for India’s Green Hydrogen Sector Through State Policies

A new independent study by the Council on Energy, Environment and Water (CEEW), supported by the Ministry of New and Renewable Energy (MNRE), reveals that India’s green hydrogen sector could unlock an additional INR 5 lakh crore (USD 61 billion) through existing state-level policies. The report highlights that 12 states already offer policy support that complements the National Green Hydrogen Mission (NGHM), enhancing opportunities for scaling both domestic production and exports.

Titled “Augmenting the National Green Hydrogen Mission: Assessing the Potential Financial Support through Policies in India”, the study analyses how state-level measures align with the NGHM and the Ministry of Power’s Green Hydrogen Policy. Green hydrogen is seen as critical for decarbonising heavy industries and powering sectors like shipping, aviation, and heavy transport, as well as serving as a long-duration energy storage solution.

The study identifies seven key states—Odisha, Maharashtra, Tamil Nadu, Uttar Pradesh, Rajasthan, Andhra Pradesh, and Gujarat—as contributing 92% of the total estimated state-level support, positioning them as pivotal to India’s green hydrogen roadmap. If fully utilised, these state-level incentives could significantly advance the goal of producing 5 million tonnes of green hydrogen annually by 2030. The support includes both power-related and non-power-related incentives, such as capital subsidies, interest subsidies, state GST reimbursements, and exemptions on electricity duty and wheeling charges. Notably, power-related benefits make up 63% of the total estimated support—around INR 3.12 lakh crore (USD 38 billion)—underscoring the importance of affordable renewable electricity in making green hydrogen economically viable.

Hemant Mallya, Fellow at CEEW, highlighted that India’s ambitious green hydrogen targets are supported by strong central and state-level financial incentives. He noted that the study helps industry and investors understand available support, reinforcing India’s appeal as a green hydrogen hub. He emphasized the need for faster, standardised clearances through centre–state coordination to realise the mission’s goals.

With supportive policies and quantified incentives established, the next stage of India’s green hydrogen development depends on effective implementation. Power-related benefits, particularly interstate open access, will be key to improving cost competitiveness. It is now up to the industry to capitalise on these incentives by initiating on-ground projects for both domestic consumption and export.

The full study, ‘Augmenting the National Green Hydrogen Mission: Assessing the Potential Financial Support through Policies in India’, by Ribhav Pal, Vishal Tripathi, Karan Kothadiya, Prateek Aggarwal, and Deepak Yadav, can be accessed here.

Limitations: While the study quantifies the total potential support, it does not estimate the proportion that can be realistically achieved, which will depend on market dynamics and policy execution. The calculations assume constant capital costs, efficiencies, and regulatory charges over the period, despite expected technological advancements.

Disclaimer: To the fullest extent permitted by law, the Ministry of New and Renewable Energy disclaims any liability for any inaccuracies, incompleteness, or unreliability of the information, analysis, opinions, advice, and recommendations in this report, or for any resulting investments or losses.