Fueling the Future, Not Forcing It: India’s Hydrogen Path Stays Flexible

In a notable shift from prescriptive policy frameworks, India’s Renewable Energy Minister has clarified that the government is not currently considering mandatory offtake requirements for green hydrogen, signaling a preference for market-driven adoption over regulatory compulsion. The announcement, made on September 16, 2025, comes amid growing global interest in green hydrogen as a cornerstone of clean energy transition and industrial decarbonization.

 

This position marks a strategic pivot in India’s approach to its ambitious National Green Hydrogen Mission, which aims to make the country a global hub for production, usage, and export of green hydrogen and its derivatives. While the mission outlines incentives and infrastructure support, the absence of mandatory consumption targets reflects the government’s intent to let demand evolve organically through commercial viability and technological maturity.

 

What Is Green Hydrogen and Why Does It Matter?

Green hydrogen is produced by splitting water into hydrogen and oxygen using electricity generated from renewable sources like solar and wind. Unlike grey or blue hydrogen, which rely on fossil fuels, green hydrogen is carbon-free, making it a critical tool for decarbonizing hard-to-abate sectors such as steel, cement, shipping, and aviation.

 

India’s push for green hydrogen is part of its broader clean energy roadmap, which includes:

The National Green Hydrogen Mission, launched in 2023, has earmarked ₹19,744 crore in funding through 2030 to support electrolyzer manufacturing, hydrogen production, pilot projects, and infrastructure development2.

 

Minister’s Statement: No Mandates, For Now

The Renewable Energy Minister’s statement that no mandates are being considered for green hydrogen offtake suggests a deliberate choice to avoid imposing minimum usage quotas on industries. This contrasts with earlier policy drafts that hinted at mandatory blending requirements for sectors like fertilizers, refineries, and steel.

 

Instead, the government is focusing on:

This approach is designed to stimulate voluntary adoption, encourage innovation, and avoid burdening industries with premature compliance costs.

 

Industry Reaction: Mixed But Cautiously Optimistic

Industry stakeholders have responded with a mix of relief and concern. On one hand, the absence of mandates provides flexibility and avoids regulatory pressure on sectors still grappling with cost and scalability challenges. On the other hand, some experts argue that clear demand signals—such as mandatory offtake—could accelerate investment and reduce uncertainty for producers.

 

Green hydrogen production remains expensive, with costs ranging between ₹250–₹300 per kg, compared to ₹150–₹180 for grey hydrogen. Without guaranteed buyers, producers may hesitate to scale up operations, potentially slowing down India’s green hydrogen rollout.

 

However, the government’s emphasis on competitive bidding and strategic partnerships is expected to create a viable market ecosystem over time. International players from the EU, Japan, and the Middle East have shown interest in collaborating with India on hydrogen exports, technology transfer, and joint ventures.

 

What’s Next for India’s Hydrogen Economy?

Despite the absence of mandates, India’s green hydrogen journey is gaining momentum. Key developments to watch include:

The government is expected to revisit the question of mandates once the market matures and cost curves decline. For now, the focus remains on building infrastructure, attracting investment, and fostering innovation.

 

Sources: Ministry of New and Renewable Energy, Green Hydrogen Policy Overview, NetZero India