India's green hydrogen ambitions face a reality check 

The Union Cabinet approved the National Green Hydrogen Mission in January 2023 with an outlay of Rs 19,744 crore through FY2029–30. The stated target is the production of at least 5 million metric tonnes per annum of green hydrogen by 2030, backed by 125 GW of dedicated renewable energy and investments exceeding Rs 8 lakh crore. Three years in, the numbers that matter are buried in Parliamentary statements, not government press releases. 

As of February 2026, India had commissioned approximately 8,000 tonnes per annum of green hydrogen production capacity. That is 0.16 per cent of the 2030 target with four years remaining. The gap between what the mission projects and what the market has delivered is structural. It has three components: a cost problem, a demand problem, and a spending problem. 

The cost problem 

Green hydrogen produced under the mission’s competitive bidding process currently costs Rs 397 per kilogram for supply to Indian Oil Corporation’s refineries, inclusive of 18% GST. For BPCL and HPCL refineries, the discovered price is Rs 387 per kilogram. These are government-negotiated procurement prices established through the SIGHT (Strategic Interventions for Green Hydrogen Transition) scheme’s Mode 2 demand aggregation process, not open-market prices. They reflect what the mission negotiates through structured tendering, not what the technology costs when deployed at scale without subsidy support. 

The cost structure behind these prices is significant.

The World Bank Group places renewable energy at 50 to 70% of the total green hydrogen production cost in India, approximately Rs 235 per kilogram at current prices. That single input cost alone approaches the full delivered cost of conventionally produced hydrogen in most industrial procurement contexts. No government document has published a grey hydrogen cost benchmark for direct comparison.

What the mission’s own competitive price of Rs 387 to Rs 397 per kilogram confirms is that even under subsidised procurement conditions, the current floor for green hydrogen remains well above what unsubsidised grey hydrogen procurement has historically cost Indian refiners. 

The mission’s 5 MMTPA target carries an implicit assumption that cost reduction will proceed fast enough to generate commercially viable demand at scale.

The government’s Parliamentary record does not make that assumption explicit, nor does it provide a sector-by-sector cost threshold below which demand becomes self-sustaining without ongoing subsidy. That design gap has not been addressed in any MNRE notification or PIB release reviewed as of June 2026. 

The demand problem 

The mission has made measurable progress on the supply side. As of May 2025, 19 companies hold a cumulative annual green hydrogen production allocation of 8,62,000 tonnes under SIGHT. Fifteen firms carry awards for 3,000 MW of annual electrolyser manufacturing capacity. On the demand side, SECI has discovered prices for 7,24,000 metric tonnes per annum of green ammonia supply to 13 fertiliser units. A further 20,000 tonnes per annum has been awarded for IOC, BPCL and HPCL refineries and 10,000 tonnes per annum for Numaligarh Refinery Ltd in Assam. 

Awarded production capacity under SIGHT stands at 8,62,000 tonnes per annum against a 5,000,000 tonnes target. Awarded capacity covers 17.2% of the 2030 goal. Commissioned capacity covers 0.16%. 

The distance between awarded and commissioned is partly a function of incentive design. The SIGHT scheme rewards its awarded capacity, not commissioned output.

No penalty for non-delivery against scheduled commercial dates has been disclosed in any MNRE (the Ministry of New and Renewable Energy) notification. The PIB Parliamentary statement of March 2026 notes explicitly that investment commitments have not been made available by project developers.

A scheme that disburses incentives against awarded capacity without a published enforcement mechanism creates a structural gap between the allocation ledger and the production register. 

The demand aggregation model has produced price discovery for the fertiliser and refinery sectors. It has not produced a blending mandate or a purchase obligation. The ministry has not issued a notification requiring any sector to procure a minimum share of green hydrogen by a specific date. Without a binding domestic purchase obligation, the demand side rests on voluntary procurement by public sector undertakings, subject to price considerations that the mission has not resolved. 

The spending problem 

The Parliamentary record makes the utilisation gap precise. In FY2023–24, against a revised allocation of Rs 100 crore, Rs 11 lakh was utilised. In FY2024–25, Rs 300 crore was allocated, but only Rs 46.26 crore was utilised. In FY2025–26, as of 19 March 2026, Rs 203.75 crore had been utilised against a Rs 300 crore allocation. 

Total cumulative allocation across the first three years stands at Rs 700 crore against a Rs 19,744 crore approved outlay. Total utilisation is approximately Rs 250 crore, which is just 1.27% of the full approved outlay. The FY26 figure shows the rate accelerating year on year. 

The Parliamentary record provides allocation and utilisation totals only. It does not provide a project-level or component-level expenditure breakdown. The mission has spent approximately Rs 250 crore across three years with no published account of which SIGHT components, pilot projects, R&D activities, or hub development expenditures received those funds. The utilisation rate is the gap most cited in public commentary. The sharper gap is the absence of any published disaggregation that would allow Parliament, industry, or civil society to assess whether the funds spent have advanced commissioning, reduced costs, or built demand. That breakdown does not exist in the public domain as of June 2026. 

With four years remaining and over Rs 19,000 crore yet to be deployed, the mission must spend an average of approximately Rs 4,750 crore per year from FY27 through FY30 to exhaust its approved outlay. The highest annual utilisation recorded to date is Rs 203.75 crore, a partial-year figure.

The mission has never deployed Rs 300 crore in a single full financial year. Whether the administrative ecosystem, the project pipeline, and the industrial capacity can absorb deployment at 15 to 20 times the current annual rate within four years is a question the mission’s public documents leave unanswered. 

What the mission has built 

The SIGHT programme has produced a functioning electrolyser manufacturing ecosystem. Fifteen firms hold awards for 3,000 MW of annual electrolyser manufacturing capacity. Scheduled commercial dates under Tranche 1 run from August 2026 and under Tranche 2 from March 2027, as per the National Green Hydrogen Mission (NGHM) portal. These are forward-looking dates recorded at the time of the award.

The portal does not publish completion confirmations against prior scheduled commercial dates, so whether earlier tranches have met their timelines is not verifiable from government records alone. Domestic electrolyser manufacturing, once operational at scale, reduces the import dependence that currently inflates project capital costs. 

Three ports have been recognised as Green Hydrogen Hubs: the Deendayal Port Authority in Gujarat, the V.O. Chidambaranar Port Authority in Tamil Nadu, and the Paradip Port Authority in Odisha. Their designation in October 2025 is the mission’s most concrete step toward an export architecture. Designation does not create export demand. 

The Carbon Credit Trading Scheme, notified in June 2023, moved seven energy-intensive sectors to compliance obligations from FY2026.

In March 2025, the Bureau of Energy Efficiency released Version 1 of the Detailed Procedure for the Offset Mechanism, and the Ministry of Power approved green hydrogen production through electrolysis as an eligible activity under the Carbon Credit Trading Scheme (CCTS) domestic offset mechanism. First Carbon Credit Certificate trades are expected by mid-2026, with risk of slippage to late 2026. A carbon price that raises the effective cost of grey hydrogen for obligated industrial users would create a demand signal for green hydrogen.

The mechanism is in place. Whether it generates a price signal strong enough to shift procurement decisions in the refinery and fertiliser sectors depends on the carbon price emerging from the first trading cycles. That price is not yet known. 

The structural gap 

India’s green hydrogen mission has built the institutional architecture: a financial incentive scheme, an electrolyser manufacturing base, a demand aggregation mechanism, port-based export hubs and a carbon market with green hydrogen in its offset window. What it has not produced, three years in, is a commercially viable price, a binding demand floor, or a published expenditure framework linking funds spent to outcomes delivered. 

The mission targets 5 million metric tonnes by 2030. Commissioned capacity today is 8,000 tonnes. Awarded capacity under SIGHT is 8,62,000 tonnes. The government has not published a revised interim target, a delivery enforcement mechanism, a sector-specific cost threshold indicating when the market can transact without subsidy support, or a component-level account of the Rs 250 crore already spent.

Four years remain. The architecture exists. The accountability does not. 

(The author is a Chennai-based independent policy research consultant.  Views are personal and do not reflect the stance of this publication)