India is setting its sights on becoming a major player in the emerging green hydrogen sector. The Indian government recently approved a substantial $2.4 billion subsidy package aimed at transforming the country”s companies into leading green hydrogen producers, consumers, and exporters. This initiative is driven by India”s chronic dependence on imported energy sources, which presents both a financial burden and a strategic vulnerability.

The country”s extensive solar power potential, with its sun-soaked lands, is a critical component of India”s renewable energy plans. India”s ambitious goal is to build 500 gigawatts of renewable electricity capacity by 2030. Now, Indian companies are increasingly viewing hydrogen as the next big opportunity.

Adani Group, in partnership with France”s Total, plans to invest $50 billion in creating the world”s largest green hydrogen ecosystem. Mukesh Ambani”s Reliance Industries is also making significant commitments to transition to green hydrogen as part of a $75 billion clean energy overhaul. State-owned energy companies like NTPC and Indian Oil Corporation are entering the green hydrogen space, further demonstrating India”s commitment to this clean energy source.

A significant portion of the government”s new program will be allocated to subsidizing the production of electrolysers, which are the machines responsible for extracting hydrogen from water. India aims to establish a production capacity of 5 million metric tonnes per year and will create usage mandates for various industries, further driving demand. The country also plans to establish coastal “hydrogen hubs” to facilitate exports.

India”s focus is primarily on green hydrogen, as opposed to “blue” hydrogen, which is produced from fossil fuels but incorporates carbon capture to reduce emissions. While blue hydrogen is currently cheaper, the demand for truly green hydrogen is expected to rise.

Despite its ambitions, India is still in the early stages of its hydrogen journey and lags behind countries like China and the United States. For instance, Beijing is already emerging as a dominant producer of electrolysers. Nevertheless, India has advantages, including some of the world”s lowest renewable electricity prices and a sizable domestic market.

In the near term, the most plausible use cases for green hydrogen in India include refining and ammonia production. Replacing coking coal in the steelmaking process is a compelling option but may take a decade to become a reality.

India”s most ambitious goal is to become a leading hydrogen exporter, although this may take longer to achieve. Starting with neighboring countries like Bangladesh and Sri Lanka could be a feasible first step. State-owned and private companies in India are already well-established in regional markets.

While some critics accuse major conglomerates like the Adani Group of “greenwashing,” these companies are well-positioned to make substantial investments in green hydrogen. Government support and financial resources enable these firms to move quickly in this strategically significant area.

The government”s new policies have been welcomed by experts in the sector. While they believe that the allocated funds may not be sufficient for the scale of India”s ambitions, it does signal the government”s seriousness and provides confidence to investors.

India”s journey into green hydrogen is just beginning, and the country has set its sights on a pivotal role in the global transition to clean energy.