New Delhi: India’s green hydrogen industry could witness rapid expansion over the next five years, with market size projected to increase nearly 14 times by 2030 as production costs decline sharply, according to a new report by Equirus Capital.
The report estimates that the cost of producing green hydrogen in India could fall from around ₹410 per kilogram in 2023 to approximately ₹180 per kilogram by 2030, making the clean fuel significantly more competitive for industrial and commercial applications.
Market Expected to Reach $2.8 Billion
Lower production costs are expected to accelerate adoption across sectors such as steel, refining, transportation and heavy manufacturing. According to the report, India’s green hydrogen market could expand from roughly $195 million in 2024 to nearly $2.8 billion by 2030, representing one of the fastest-growing clean energy segments in the country.
The projected annual growth rate is estimated at around 56%, significantly higher than the expected global average during the same period.
Government Policy Driving Growth
Industry analysts attribute the expected decline in costs to India’s abundant renewable energy resources, falling solar power tariffs and continued policy support under the National Green Hydrogen Mission.
Launched in 2023 with a financial outlay of ₹19,744 crore, the mission aims to produce at least 5 million metric tonnes of green hydrogen annually by 2030, supported by 125 GW of dedicated renewable energy capacity and investments estimated at ₹8 lakh crore.
The initiative also seeks to reduce carbon emissions while strengthening India’s position as a global hub for clean energy technologies.
Incentives for Manufacturing
A significant portion of government funding has been allocated through the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, which provides financial incentives for both hydrogen production and domestic electrolyser manufacturing.
Additional funding has been earmarked for pilot projects, hydrogen hubs, research and development, and workforce skill development to help build a complete green hydrogen ecosystem.
Renewable Energy Expansion Supports Industry
The report highlights that India’s growing renewable energy capacity will play a critical role in supporting hydrogen production.
Government officials have indicated that the country’s non-fossil fuel electricity capacity is expected to cross 300 GW, while the long-term target remains 500 GW by 2030. Expanding domestic manufacturing of solar equipment, electrolysers and fuel cells is also expected to reduce import dependence and improve supply chains.
Investment Activity Remains Strong
The clean energy sector continues to attract substantial investor interest.
Recent years have seen major investments in renewable energy assets, infrastructure, data centres and logistics, alongside increased fundraising through public markets and infrastructure investment trusts (InvITs). The report notes that renewable energy has remained one of the most active segments for mergers, acquisitions and equity fundraising since 2024.
Challenges Ahead
Despite strong growth prospects, the report cautions that upcoming regulatory changes could affect project economics.
Stricter grid compliance rules for renewable energy projects, scheduled to take effect in 2027, may increase financial penalties for projects that fail to meet power delivery commitments. Industry participants are expected to closely monitor these regulations alongside the government’s ongoing infrastructure asset monetisation programme.
Outlook
With production costs expected to decline significantly and policy support continuing, India appears well-positioned to become a major player in the global green hydrogen economy. Analysts believe that sustained investment, technological innovation and expanding renewable energy infrastructure will be critical to achieving the country’s long-term clean energy ambitions.
