India's green hydrogen sector is advancing from policy ambition to commercial reality with the National Green Hydrogen Mission now funded with ₹19,744 crore of government outlay, representing an increase from the previously reported ₹17,490 crore budget. Recent government auctions of green ammonia have yielded record-low prices, demonstrating that this energy source has become cost-competitive. Industrial investment is following this momentum, with the infrastructural backbone taking shape to support large-scale project execution. The enhanced funding reflects the government's commitment to accelerating the sector's transition from nascent development to commercial viability.
India's green hydrogen sector is entering a phase where exponential growth could be possible, according to reports from Business Standard. The country is currently testing green hydrogen technologies across multiple projects with the aim of achieving the national target of 5 million tonnes per annum (MTPA) by 2030. However, with less than 10,000 tonnes per annum of capacity currently operational, mostly in pilot and small-scale projects, it is clear that the ambitious 5 MTPA target will be missed. The nascent stage of development is compounded by projects facing delays due to novel technology, equipment procurement delays, and time taken to build renewable energy projects supporting green hydrogen production.
White hydrogen, also known as geological or natural hydrogen, is emerging globally as a potential low-emission, low-cost hydrogen source that could complement India's green hydrogen development. Unlike conventional hydrogen pathways, white hydrogen is produced by natural geological processes and can be extracted directly from subsurface formations without electricity-intensive electrolysis or emission-intensive fossil-fuel conversion. According to the Council on Energy, Environment and Water Integrated report, white hydrogen offers several advantages including low carbon intensity, minimal water and land requirements, and significantly lower energy input compared with electrolytic hydrogen. Currently, Mali remains the only country with an operational white hydrogen well supplying low-cost electricity locally, though more than 15 countries are actively engaged in research, exploration, and early-stage drilling activities.
The government recently concluded tranche 1 of SIGHT Component 2 bids, which saw some of the lowest prices globally. As reported by Business Standard, the auction called Mode 2A for green ammonia secured firm demand contracts for 724 kilotonnes per annum of capacity across 13 projects bid out to eight developers. Interestingly, every project witnessed a winning bid below the reserve price, with the lowest price discovered at ₹52 per kg after factoring in the incentive. Mode 2B of the auction, pertaining to oil-and-gas companies inviting bids for green hydrogen supply at the lowest cost, saw prices fall by 17% within a year to ₹279 per kg, described as a highly competitive level for green hydrogen globally.
India's renewable energy story demonstrates remarkable progress, with the country reaching 283 GW of total installed renewable energy capacity as of March 2026. In July 2025, renewable energy sources generated more than half of India's total electricity demand for the very first time, with the sector expanding at nearly 11 per cent compounded annually over the past decade. The biofuel industry has equally impressive achievements, with India achieving the 19 per cent mark in ethanol blending in petrol by the end of 2025, initially expected by 2030. Given the multitude of incentives, many states have joined the green hydrogen bandwagon to attract investment, with at least 15 states having announced green hydrogen policies, and eight more in early stages of formulation. Despite recent progress, the sector faces significant barriers including lack of committed buyers, unclear demand signals, high production costs, and inadequate infrastructure, particularly for storage, transportation and shared facilities.
