India’s Green Hydrogen Potential: FICCI–EY 2025 Report

Syllabus: Climate & Energy (UPSC GS III)
Source: DTE

Context

A new FICCI–EY report highlights that India can capture 10% of the global green hydrogen market if it tackles economic, infrastructural, and demand-related challenges. It suggests shifting fossil fuel subsidies and introducing a domestic use mandate to build reliable demand.

What is Green Hydrogen?

• Produced through electrolysis of water using renewable energy.
• Zero-emission fuel → key uses in steel, fertilisers, mobility, and shipping.
• Helps reduce greenhouse gas emissions and supports net-zero goals.

India’s Current Efforts

• National Green Hydrogen Mission (2023) – ₹19,744 crore outlay; 5 MMT capacity target by 2030.
• Needs 125 GW renewable energy, electrolyser manufacturing, and water infrastructure.
• Pilot Projects: 37 hydrogen vehicles, 9 refuelling stations in progress.
• Cost Trends: From $4–4.5/kg today → projected $3–3.75/kg by 2030.

Key Challenges

• High Initial Costs – double that of grey hydrogen due to efficiency and capex issues.
• Fossil Fuel Subsidies – distort competitiveness.
• Infrastructure Gaps – renewable integration, pipelines, storage, and water supply.
• Uncertain Demand – industries hesitant without assured offtake.
• Global Competition – EU, Japan, South Korea investing heavily.

Recommendations of the Report

• Redirect Subsidies – shift from fossil fuels to renewables & hydrogen.
• Industry Mandates – compulsory green hydrogen use in steel, fertilisers, shipping.
• Carbon Pricing – tax carbon to make hydrogen competitive.
• Demand Aggregation – pooled procurement with payment security.
• Export Strategy – target 10 MMT export to EU, Japan, South Korea.
• Boost R&D – scale electrolyser manufacturing and hydrogen startups.

Green hydrogen projects in India

Projected cost reduction of green hydrogen in India (2023-2030)

Global & Indian Market Outlook

• Global Market: $8.78 bn (2024) → $199 bn (2034), CAGR 41.5%.
• India’s Market: $2.81 bn by 2030, CAGR 56% (2024–30).

Conclusion

India has the resources and geographic advantage to become a global hub for green hydrogen. With policy reforms, subsidy redirection, infrastructure expansion, and global partnerships, India could secure 10% of the global hydrogen market by 2030 and emerge as a clean energy leader.