The policies shaping the new green hydrogen ecosystem

India's central and state governments have developed a range of enabling policies for the green hydrogen sector. Their support is designed to incentivize production, encourage demand, simplify regulation and nurture a new ecosystem. Financial support is especially crucial given the higher initial production cost of green hydrogen. Focused intervention can bridge the cost gap and unlock economies of scale to make green hydrogen more viable. 

The launchpad – National Green Hydrogen Mission

India's strategy is driven by the Rs 19,744 crore National Green Hydrogen Mission (NGHM). This was launched in January 2023, with a target of 5 MMTPA green hydrogen production by 2030, scalable to 10 MMTPA. This would be powered by 125 GW additional renewable energy capacity. NGHM aims to bring production costs down to USD 1.5/kg through financial incentives, new infrastructure, research and skilling and streamlined regulation. 

SIGHT and the importance of financial support

NGHM uses incentives to shape the green hydrogen ecosystem. It offers production-linked incentives for green hydrogen and electrolyzer manufacturing through the Rs 17,490 crore SIGHT program, as well as funding for public-private research collaboration. It also encourages demand through measures such as viability gap funding for pilot projects in steel and transportation and blending mandates for refineries and fertilizer plants.

Streamlined regulations for green hydrogen

The government has simplified processes to support green hydrogen. It has added green hydrogen to the National Single Window approvals system. Green hydrogen plants are exempt from environmental clearances. 100% FDI is now permitted under the automatic route, and there are customs waivers on electrolyzer imports as well as GST concessions on components. The government has further waived transmission charges for electricity in green hydrogen production and enabled renewable energy banking for green hydrogen. 

Defining new standards and certifications

India has set an emission standard of 2 kg CO₂e/kg H₂ for green hydrogen. In 2025, MNRE introduced a Green Hydrogen Certification scheme for monitoring and verification of production. The Bureau of Energy Efficiency also announced an offset mechanism for key sectors using green hydrogen, to help them trade carbon credits. Green hydrogen producers can now generate tradable Renewable Energy Certificates. This will help build investor confidence and boost the credibility of Indian green hydrogen for export markets.

The states leading the way

NGHM supports the development of regional green hydrogen hubs in partnership with states. Several states have also launched their own green hydrogen policies. A CEEW study shows that state incentives could unlock USD 61 billion (approx. 521,000 crore) for green hydrogen in India. Just seven states—Maharashtra, Gujarat, Uttar Pradesh, Odisha, Tamil Nadu, Rajasthan and Andhra Pradesh —account for 92% of the support on offer, and power incentives constituted a whopping 62% of this figure. We look here at three of the frontrunners:

• Maharashtra approved its Harit Hydrogen Policy (India's first) in 2023, with Rs 8,562 crore of financial incentives for production hubs and skill development. The state offers capital cost subsidies up to 30% for green hydrogen projects, as well as a 60% discount on transmission charges and waivers on electricity duty for green hydrogen projects. It also provides exemptions on water charges and stamp duty.
• Gujarat has identified green hydrogen and electrolyzers as ‘thrust manufacturing sectors’ under the Atmanirbhar Gujarat scheme. It offers interest subsidies, tax rebates and exemptions on stamp duty and registration charges. The state has also offered 500,000 acres of land on a 40-year lease for green hydrogen production. It now aims to establish Kandla port as a green hydrogen export hub.
• Uttar Pradesh is focusing on the ease of doing business, offering capital subsidies up to 40% and subsidized land allocation. Land for green hydrogen is also exempted from stamp duty. The state offers ten-year exemptions on electricity duty and transmission charges, as well as single-window clearances and dedicated water resources for green hydrogen projects.
  
  

Through focused incentives and progressive regulation, India is well-placed to emerge as a global leader in green hydrogen. At the current pace, its ambitious target of a 10% share of the global green hydrogen market could be within reach. The course of the sector will have major implications for India's energy security, economic growth and climate agenda.