India Poised for 40% Drop in Green Hydrogen Costs Amid Policy Push and Cheaper Renewables – EQ
In Short : India’s green hydrogen production cost is projected to fall by up to 40%, reaching ₹260–310 per kg, according to an IEEFA report. The decline is driven by government incentives, reduced GST, low-cost renewable energy, and open-access waivers. These factors aim to boost the commercial viability of green hydrogen and support India’s clean energy transition.
In Detail : The cost of producing green hydrogen in India is expected to decline by up to 40%, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA). This significant reduction would bring the price down to approximately ₹260–310 per kilogram, or about USD 3–3.75/kg.
The anticipated price drop is largely attributed to supportive government policies and incentives. These measures are designed to promote green hydrogen as a key solution for decarbonizing hard-to-abate sectors such as steel, fertilizers, and heavy transport.
One of the major contributing factors is the availability of low-cost renewable electricity, which plays a crucial role in green hydrogen production through electrolysis. As India continues to expand its renewable energy capacity, the input costs for hydrogen production are expected to decrease significantly.
In addition to affordable power, the Indian government’s decision to offer open-access waivers and reduce the Goods and Services Tax (GST) on key equipment is expected to further enhance the economic feasibility of green hydrogen.
These policy interventions are part of India’s broader strategy to become a global hub for green hydrogen production and exports. The country has set ambitious targets under the National Green Hydrogen Mission to scale up production and infrastructure rapidly.
Overall, the declining cost trajectory and policy support signal strong momentum for green hydrogen in India. If the trend continues, the country could see accelerated adoption across industries, contributing meaningfully to its decarbonization and energy security goals.
