India is working towards a major shift in how it produces and uses energy. At the 2021 United Nations Climate Change Conference, the country announced its Panchamrit commitments. These include creating 500 GW of non-fossil fuel-based energy capacity by 2030, meeting at least half of its energy requirements through renewable sources by the same year and reaching net-zero emissions by 2070. India later updated its climate commitments to achieve around 50% of cumulative installed electricity capacity from non-fossil fuel sources by 2030.
The country reached 50% of its installed electricity capacity from non-fossil fuel sources in June 2025, more than five years ahead of the target. However, the energy transition will require changes beyond electricity generation. Industries such as steel, fertilisers and oil refining also need cleaner alternatives to the fossil fuels and feedstocks they currently use.
Green hydrogen could become one such alternative. It is produced using renewable energy, commonly through electrolysis, a process that splits water into hydrogen and oxygen. Unlike grey hydrogen, which is generally produced using natural gas, green hydrogen can be made with much lower associated emissions. Its potential applications include fertiliser production, oil refining, steelmaking and some forms of heavy transport.
The development of this sector could also create opportunities for equipment manufacturers, engineering companies and smaller businesses that supply products and services to the energy industry.
The National Green Hydrogen Mission and Policy Framework
The Government of India approved the National Green Hydrogen Mission in January 2023 with an initial financial outlay of ₹19,744 crore. The mission aims to establish India as a global centre for the production, use and export of green hydrogen. Its main target is to develop an annual green hydrogen production capacity of at least 5 million metric tonnes by 2030.
The mission is expected to require around 125 GW of associated renewable energy capacity. Government estimates also project investments of more than ₹8 lakh crore, over six lakh jobs and an annual reduction of nearly 50 million metric tonnes in greenhouse gas emissions by 2030. These are projections based on the mission’s planned scale, not outcomes already achieved.
A major part of the mission is the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme. It has an allocation of ₹17,490 crore, divided into two components. Component I has ₹4,440 crore for incentives supporting domestic electrolyser manufacturing, while Component II has ₹13,050 crore for incentives supporting green hydrogen production.
Government Initiatives towards Green Hydrogen:
The government has awarded incentives to 15 companies for a combined electrolyser manufacturing capacity of 3,000 MW per year. Under the production incentive component, incentives have also been awarded for 8.62 lakh tonnes of green hydrogen production capacity annually. These figures represent awarded capacities, not actual production.
According to a government update, around 8,000 tonnes per annum of green hydrogen production capacity had been commissioned by February 2026. This shows that projects are beginning to move beyond announcements, although the sector still has considerable ground to cover before reaching its 2030 target.
The mission also provides policy support to encourage investment. One important measure is the waiver of Inter-State Transmission System charges for eligible green hydrogen and green ammonia projects commissioned by 31 December 2030. Such measures can help reduce the cost of renewable electricity used in hydrogen production, although the benefits depend on the applicable eligibility conditions.
Major Green Hydrogen Projects in India
Several companies are taking steps towards developing green hydrogen production facilities and related technologies in India. These projects are important because they demonstrate how the sector is moving from policy planning towards infrastructure development and domestic manufacturing.
One major development is the proposed green hydrogen hub at Pudimadaka in Andhra Pradesh. NTPC Green Energy Limited and the New and Renewable Energy Development Corporation of Andhra Pradesh are jointly developing the project. In January 2025, NTPC announced that the foundation stone for the project would be laid.
The announced plans include 20 GW of renewable energy projects, green hydrogen production capacity of 1,500 tonnes per day and 7,500 tonnes per day of green hydrogen derivatives. These derivatives are expected to include green methanol, green urea and sustainable aviation fuel. The project is planned across approximately 1,600 acres and is expected to include manufacturing facilities, chemical storage infrastructure and other supporting facilities.
These figures describe the project’s proposed scale and should not be confused with an operational production facility. However, the development indicates the kind of infrastructure and investment that India’s green hydrogen sector may require.
Green Hydrogen Plant: GAIL
GAIL has also commissioned a green hydrogen plant at its Vijaipur facility in Madhya Pradesh. In May 2024, the company inaugurated its 10 MW proton exchange membrane (PEM) electrolyser-based plant. It has a stated production capacity of 4.3 tonnes of hydrogen per day and uses renewable electricity for electrolysis.
GAIL initially planned to use the hydrogen alongside natural gas in its existing plant processes. The company also outlined plans to supply hydrogen to retail customers in nearby areas. The project is an example of how existing energy companies are exploring hydrogen production and its use within their operations.
Domestic electrolyser manufacturing is another important development. Larsen & Toubro commissioned its first indigenously manufactured 1 MW hydrogen electrolyser at its facility in Hazira, Gujarat, in February 2024. The unit has a rated capacity of 1 MW, expandable to 2 MW, and can produce up to 200 Nm³ of hydrogen per hour.
The electrolyser was scheduled to undergo further testing following its commissioning. L&T also highlighted its plans to develop domestic manufacturing capabilities and work with Indian vendors and suppliers. This is relevant for the wider supply chain because large-scale hydrogen production will require specialised equipment and manufacturing support.
Business and MSME Opportunities
The development of green hydrogen projects will require more than electrolysers and renewable energy plants. A wider network of suppliers will be needed to support production, storage, transportation and safety. This could create opportunities for micro, small and medium enterprises (MSMEs), including businesses that may not be directly involved in hydrogen production.
Water treatment is one possible area. Electrolysis requires suitable water quality, creating a potential role for companies supplying water purification and treatment systems. Businesses working with electrical equipment may also be able to explore opportunities in transformers, rectifiers, power distribution units and control panels used in electrolysis facilities.
Storage and transportation present another area for specialised suppliers. Hydrogen requires equipment designed for its compression, storage and movement. Manufacturers working with specialised cylinders, valves, seals, sensors, leak detection systems and industrial piping may find opportunities as more projects are developed.
However, hydrogen handling involves specific safety and technical requirements. Businesses entering this segment will need to understand the relevant standards and certification requirements. Conventional gas-handling equipment cannot automatically be assumed to be suitable for hydrogen applications.
Existing industries could also contribute to demand. Refineries and fertiliser plants already use hydrogen in their operations, making them potential users of green hydrogen as production capacity increases. Steelmakers are also exploring hydrogen-based processes, including its use in direct reduced iron production.
For MSMEs, the opportunities may extend to equipment supply, fabrication, engineering support, installation, maintenance, testing and safety services. The actual demand will depend on how quickly projects progress, the cost of green hydrogen and the technical requirements set by project developers.
Smaller businesses may also find it useful to work with larger engineering companies and technology providers. Such partnerships can help them understand project specifications and identify areas where their existing manufacturing or engineering capabilities can be applied.
The Role of Industry Bodies and PHDCCI
Industry bodies can help connect businesses with information, partnerships and policy discussions in an emerging sector. This is particularly relevant for MSMEs, which may have the technical capability to supply equipment or services but may not always have direct access to project developers, technology providers or government agencies.
The PHD Chamber of Commerce and Industry (PHDCCI) has established a Centre of Excellence in Green Hydrogen in collaboration with Greenstat Hydrogen India Pvt. Ltd., which serves as its knowledge partner. The memorandum of understanding was signed on 26 October 2022 at PHD House in New Delhi.
According to PHDCCI, the centre aims to connect government, industry and academia while supporting research, partnerships and capacity-building across the hydrogen value chain. Its focus areas include training for MSMEs, awareness of hydrogen safety, technology development and understanding standards and regulations.
The centre also identifies activities such as workshops covering hydrogen production, distribution, transportation and storage. These initiatives are intended to help businesses understand the sector and assess the requirements involved in entering the green hydrogen supply chain.
For smaller businesses, access to such information can be useful when evaluating new opportunities. Understanding equipment standards, safety practices and certification requirements can help MSMEs make more informed decisions before investing in new capabilities.
India’s green hydrogen sector is still developing. Its growth will depend on production costs, renewable power availability, infrastructure and demand from industrial users. The National Green Hydrogen Mission has created a financial and policy framework, while projects by companies such as NTPC, GAIL and Larsen & Toubro demonstrate progress in production and domestic manufacturing.
As the sector develops, its opportunities could extend beyond large energy companies to manufacturers, engineering firms, technology providers and MSMEs that form part of the wider industrial supply chain.