India’s hydrogen demand is projected to nearly double to around 12 million tonnes per annum by 2030, driven primarily by fertilisers, refining and petrochemicals, according to a new report by Nuvama Institutional Equities.
The report highlights that fertilisers are expected to remain the largest consumer, accounting for more than half of total demand at approximately 6.1 million tonnes per annum by the end of the decade. Refineries are likely to follow closely, with demand estimated at around 4.5 million tonnes per annum, while petrochemicals could contribute an additional 1.3 million tonnes as new production capacities are commissioned across the country.
Beyond these established sectors, green hydrogen consumption is expected to expand gradually into areas such as steelmaking, long-haul heavy transport, shipping and power generation. However, the report notes that these applications are more likely to scale up in the longer term, once costs fall and infrastructure matures.
India’s ambitions in this space are anchored in the National Green Hydrogen Mission, which serves as the central policy framework for developing domestic green hydrogen capacity and associated infrastructure. The mission has a total financial outlay of about ₹197 billion, with the bulk of funding channelled through the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme. This scheme is designed to support green hydrogen production, boost consumption and encourage domestic manufacturing of electrolysers, alongside pilot projects and research initiatives.
Since the announcement of India’s green hydrogen policy in 2022 and the formal launch of the mission in early 2023, as many as 13 states have introduced their own incentive packages. These include exemptions on power transmission charges, capital subsidies, interest support, skill development programmes and relief on land and state-level taxes. Combined central and state-level measures could translate into a policy support pool approaching USD 61 billion, creating a significant opportunity for private sector participation.
Despite strong policy momentum, high costs remain the most significant challenge. Green hydrogen currently costs between USD 3.5 and USD 4 per kilogram, compared with around USD 2.2 per kilogram for grey hydrogen. The report suggests that targeted policy interventions and market improvements could reduce green hydrogen costs by up to USD 1.9 per kilogram. Waivers related to power banking and open access charges alone could cut nearly a quarter of current costs, supported further by declining electrolyser prices and cheaper renewable energy.
The report also assesses India’s prospects in exporting green ammonia. Recent tender prices ranging from USD 594 to USD 774 per tonne indicate improving commercial viability compared with historical grey ammonia prices. However, India’s advantage of low solar and wind power tariffs is partly offset by higher financing costs and relatively lower plant load factors, which may constrain global competitiveness.
On the technology front, electrolyser stack costs are expected to fall sharply, potentially by up to 75 per cent, driven by innovation, alternative materials and increased domestic manufacturing. The report estimates that nearly 88 per cent of the electrolyser supply chain could be localised within India, reducing import dependence and strengthening the clean energy manufacturing ecosystem.
Overall, while sectors such as steel, shipping and heavy transport are likely to emerge as major green hydrogen consumers after 2030, the immediate priority remains reducing costs and building a robust foundation to support future demand growth.
