India’s renewable hydrogen developers are hopeful that cost competitiveness and early offtake agreements will drive green ammonia exports by 2027, despite ongoing uncertainty in the sector, according to S&P Global Commodity Insights. The country plans to export over half of its 5 million metric ton renewable hydrogen target by 2030, with major production hubs emerging in coastal states such as Odisha, Andhra Pradesh, Tamil Nadu, Kerala, and Gujarat.
India’s renewable hydrogen sector is eyeing green ammonia exports by 2027, leveraging cost advantages and early offtake interest, even as the industry faces a challenging and uncertain landscape, according to S&P Global Commodity Insights. The country aims to export more than half of its planned 5 million metric tons of renewable hydrogen production by 2030. Key coastal states—Odisha, Andhra Pradesh, Tamil Nadu, Kerala, and Gujarat—are expected to serve as major production hubs. Several large-scale developers in these states are currently progressing through front-end engineering design and final investment decision stages.
S&P Global’s Hydrogen Production Assets database reports nearly 143 renewable or low-carbon hydrogen projects in India, with a combined capacity of 10.55 million metric tons. The government’s National Green Hydrogen Mission, with an outlay of Rs 197.44 billion (US$ 2.37 billion), is supporting the development of hydrogen production, electrolyzers, and integrated hubs. (The mission aims at creation of export opportunities for Green Hydrogen and its derivatives; Decarbonisation of industrial, mobility and energy sectors; reduction in dependence on imported fossil fuels and feedstock; development of indigenous manufacturing capabilities; creation of employment opportunities; and development of cutting-edge technologies.)
The S&P report, however, highlights a mismatch between production costs and market demand that remains a major hurdle. According to market data from Platts Market Heards, the cost of producing renewable hydrogen in India typically exceeds US$ 5/kg, while buyers—particularly in the refining and fertilizer sectors—are only willing to pay under US$ 4/kg. In the case of renewable ammonia, Indian fertilizer companies imported conventional ammonia at an average price of US$ 398/mt in 2024, whereas renewable ammonia offers are around US$ 800/mt FOB. For comparison, Platts assessed the cost of hydrogen produced via alkaline electrolysis (including capex) at US$ 4.32/kg in Queensland as of March 12, a 16.44% decline from the previous month. In Japan, similar hydrogen production was assessed at US$ 5.44/kg, down 19% over the same period.
Factors contributing to India’s cost advantage and the challenges it faces
India enjoys a cost advantage in green hydrogen production due to several key factors. The country has abundant solar and wind energy resources, with relatively low renewable energy costs compared to other regions, making it ideal for green hydrogen generation. Government initiatives like the National Green Hydrogen Mission provide financial incentives and aim to produce 5 million metric tons annually by 2030, boosting industry growth. The mission seeks to boost green hydrogen’s contribution to 46% of India’s total hydrogen demand by 2030, fostering a robust market for its production and supporting technologies.
Additionally, as production scales up, India benefits from economies of scale, which lower per-unit costs. Large-scale facilities enhance operational efficiency through better resource utilization and technological optimization, further driving down the overall cost of production.
However, despite its cost advantage, India faces key challenges in the global green hydrogen market. A major hurdle is the lack of dedicated infrastructure for hydrogen transport and storage, unlike Europe’s advanced network. Additionally, a mismatch between production costs and buyers’ willingness to pay limits firm offtake agreements, which are vital for attracting investment. Regulatory uncertainty, particularly in export markets like the EU, further complicates growth. Clarity on frameworks such as the EU’s RED III rules and international blending standards is crucial for Indian developers to ensure long-term market access and stability in the green hydrogen sector.
Leading Green Hydrogen producing companies in the country include: Reliance Green Hydrogen and Green Chemicals, ACME Cleantech Solutions, Greenko Zero, Torrent Power, Welspun New Energy, ADANI Green Energy, Indian Oil Corporation Ltd, Oil & Natural Gas Corporation Ltd, GAIL (India) Ltd, National Thermal Power Corporation Ltd, Larsen & Toubro Ltd, JSW Energy.
The growth opportunity
India’s green hydrogen sector is on a strong growth trajectory, driven by rising domestic demand from key industries like refineries, steel, and cement, all pursuing decarbonization. The government is also actively promoting the blending of green hydrogen with compressed natural gas (CNG) for city bus fleets. This initiative is helping to establish a market not only for green hydrogen production but also for the supporting infrastructure needed for its storage, transportation, and dispensing.
The market is expected to reach US$ 8 billion by 2030 and soar to US$ 340 billion by 2050. NITI Aayog, the government’s policy think tank, projects the electrolyzer market to hit US$ 5 billion by 2030 and US$ 31 billion by 2050. This momentum is being powered by favorable policy measures—such as production incentives, tax breaks, and the establishment of green hydrogen corridors—which are attracting robust interest from both domestic and international players.
Export prospects are also strong, especially in Europe due to strict carbon regulations.
Anri Nakamura, Associate Director at S&P Global Commodity Insights, highlighted that India is among the few nations capable of producing highly cost-competitive green hydrogen. This positions India as a key supplier for regions like Europe, where strict regulations mandate the use of green hydrogen.
However, the scenario in the Far East differs. Countries such as South Korea and Japan have more relaxed carbon intensity standards for clean hydrogen, enabling them to meet their targets using blue hydrogen or imported ammonia—often at a lower cost than green hydrogen or ammonia produced in India.
