India has commissioned around 8,000 tonnes per annum capacity of green hydrogen as of February, against a target of 5 million tpa by 2030, achieving about 0.16% of the ambitious milestone envisaged under ₹19,744 crore-National Green Hydrogen Mission approved by the cabinet on January 4, 2023.
The wide gap between allocation of annual budgets under the National Green Hydrogen Mission (NGHM) and utilization of funds suggests tardy progress . According to data submitted in the Lok Sabha on March 25 by minister of state for new and renewable energy and power Shripad Yesso Naik, 68%, or ₹203.75 of the ₹300 crore allocated in 2025-26 (revised estimates) was used, although this was an improvement over the 15.42% or ₹46.26 crore of the ₹300 crore allocated in 2024-25 (RE), and the 0.11% or ₹11 lakh of the ₹100 crore allocated in 2023-24 (RE).
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India’s progress on the green hydrogen front has come under scrutiny following the current energy crisis, resulting from the war in West Asia.
While Naik gave only revised estimates, budget documents showed that budget estimates (BEs) were even more ambitious, indicating gaps in ambition, annual planning, and execution. The budget estimate (BE) for the green hydrogen mission in 2023-24 was ₹297 crore, which was later trimmed to ₹100 crore at the RE stage. Similarly, budget for the mission was Re 600 crore in BE of 2024-25, which was reduced to ₹300 crore at the RE stage. In 2025-26 BE, the allocation under the head was again ₹600 crore, but in the RE stage it was again trimmed to ₹300 crore. Now, in the current financial year, BE for the mission has been maintained at ₹600 crore.
According to people aware of the development who spoke on condition of anonymity, the Union finance ministry allocated ₹600 crore for green hydrogen in the 2026-27 budget despite the mission’s administrative ministry – the ministry of new and renewable energy (MNRE) – seeking ₹800 crore. “Apparently, the finance made a lower allocation because money allocated in previous budgets remained unspent and progress of the mission was slow,” one of them said.
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A spokesperson of MNRE said green hydrogen is an “emerging industry” that is simultaneously navigating technology development, cost reduction, ecosystem building, and market creation, hence, globally, the transition from pilot-scale demonstration to large scale commercial production follows a well-established development trajectory.
“India is progressing along that same curve. The limited commercial output at present is therefore not an anomaly specific to India, it reflects where the sector stands internationally in terms of technology and market maturity. What distinguishes India’s position is that it has moved decisively on policy, incentive structures, and capacity awards within a relatively short timeframe, laying the groundwork for the commercial scale up that lies ahead,” this person added.
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According to the spokesperson, structural issues and expensive electrolyser adds to both cost and project lead time. Besides, there are several demand side challenges impacting project economics and investment viability. “The government is fully aware of these constraints, and the design of the National Green Hydrogen Mission directly addresses each of them in a structured and phased manner,” the spokesperson said. One such measure is Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), which is like production-linked incentive (PLI) scheme. It has two distinct financial incentive mechanisms – targeting domestic manufacturing of electrolysers and production of green hydrogen.
Electrolysers use renewable energy to split water into oxygen and hydrogen.
Currently, pilot projects across steel, transport, and shipping are generating the real-world operational data needed to de-risk larger commercial investments, the spokesperson said. The standards and certification framework being established is building the regulatory confidence that long-term investors and financiers require.And the demand-side critical challenge, in an emerging sector, has been proactively addressed, this person added.
According to the spokesperson, since the inception of the mission, a number of developers have endeavored to set up small plants to establish different technologies and business models for proving the hydrogen capacity. “The main pathways adopted are (i) electrolysis route and (ii) bio-mass route. Upto March 2026, about 8000 tons per annum production capacities have been reported at various locations,” the person said.
As per the ministry’s data, about 20 companies have created a total capacity of 7,968.87 tonnes across the countries. Some of the companies are, JSW Steel with 3,600 tonnes per annum (TPA) capacity at Vijayanagar (Karnataka), GAIL India (1,752 TPA in Vijaipur, Madhya Pradesh), Adani New Industries Ltd(876 TPA in Kutch, Gujarat), and Bharat Petroleum Corporation Ltd (780 TPA at its Bina Refinery).
The green hydrogen mission first found its mention in Prime Minister Narendra Modi’s Independence Day speech on August 15, 2021. “To achieve the goal of Green Hydrogen, I am announcing the National Hydrogen Mission today with this tricolour as a witness,” a PMO statement said in a statement, quoting him.
“We have to make India a Global Hub for Green Hydrogen Production and Export in the ‘Amrit Kaal’. This will not only help India to make a new progress in the field of energy self-reliance but will also become a new inspiration for Clean Energy Transition all over the world,” the statement added, again quoting the PM.
