The Government of India is accelerating efforts to optimise the country’s energy mix and significantly reduce the cost of green hydrogen production under the National Green Hydrogen Mission (NGHM), aiming to position India as a global hub for the production, use, and export of green hydrogen and its derivatives.
India’s green hydrogen production capacity is projected to reach 5 million metric tonnes per annum (MMTPA) by 2030, supported by a combination of financial incentives, policy reforms, infrastructure development, and renewable energy expansion.
Incentives Driving Cost Reduction
Under the NGHM, the government has rolled out multiple incentive schemes to strengthen domestic manufacturing and ensure stable demand for green hydrogen:
Electrolyser Manufacturing Incentive Scheme:
Fifteen companies have been awarded a cumulative manufacturing capacity of 3,000 MW per annum, with total incentives amounting to ₹4,440 crore.
Green Hydrogen Production Incentive Scheme:
Eighteen companies have been allocated a combined production capacity of 8,62,000 tonnes per annum, supporting early-stage market creation.
Refinery Procurement Scheme:
Two companies have been awarded 20,000 tonnes per annum capacity for the supply of green hydrogen to Indian refineries.
Green Ammonia Procurement:
The Solar Energy Corporation of India (SECI) has discovered prices for 7,24,000 tonnes per annum of green ammonia, a derivative of green hydrogen, for supply to 13 fertiliser units across the country.
Transmission and Fiscal Incentives
To further lower production costs, the government has announced significant transmission and fiscal incentives. Green hydrogen and green ammonia plants commissioned on or before December 31, 2030, using renewable energy, will receive 25-year exemption from Inter-State Transmission System (ISTS) charges from the date of commissioning.
Additionally, duty benefits under Section 26 of the SEZ Act, 2005, have been extended for the installation and operation of renewable energy equipment used exclusively for captive consumption in green hydrogen units located in Special Economic Zones (SEZs).
These incentives aim to secure long-term offtake agreements, ensure demand certainty, and promote industrial decarbonisation.
Optimising Energy Mix Through Renewable Expansion
India is rapidly scaling up low-cost renewable energy capacity to support green hydrogen production, backed by competitive tariff-based bidding, large-scale solar and wind deployment, and enabling policy frameworks.
Key policy measures include:
Issuance of Standard Bidding Guidelines for procurement of power from grid-connected solar, wind, wind-solar hybrid, and Firm & Dispatchable Renewable Energy (FDRE) projects.
Exemption from ALMM and RLMM requirements for renewable energy plants located in SEZs or Export Oriented Units (EOUs) supplying power exclusively to green hydrogen production facilities.
100% Foreign Direct Investment (FDI) permitted under the automatic route.
Implementation of the Solar Parks and Ultra Mega Solar Power Projects Scheme to provide land and transmission infrastructure for large-scale renewable installations.
ISTS charge waivers for inter-state sale of solar and wind power for projects commissioned by June 30, 2025, for green hydrogen projects till December 2030, and for offshore wind projects till December 2032.
Expansion of transmission infrastructure under the Green Energy Corridor Scheme, including new transmission lines and substations.
Preparation of a national transmission plan till 2030 to support India’s steep renewable energy growth trajectory.
The details were shared by Union Minister of State for New and Renewable Energy, Shri Shripad Yesso Naik, in a written reply to the Rajya Sabha, highlighting the government’s commitment to building a globally competitive green hydrogen ecosystem.
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