India stands poised to transform its abundant renewable energy potential into a cornerstone for decarbonizing hard-to-abate sectors like steel, fertilizers, refining, and heavy transport. With solar tariffs as low as ₹2.20 per kWh and a projected green hydrogen production cost of $1.50–2.00/kg by 2030, India could emerge as a cost-competitive hub in a multi-billion global market. Yet, as outlined in the insights report ‘Accelerating Green Hydrogen: Unlocking India’s Technological Prowess’ by Xynteo and the Indian Institute of Technology (IIT) Madras Energy Consortium, systemic barriers—spanning financing, infrastructure, regulation, coordination, and competitiveness—hinder the leap from lab innovation to commercial deployment.
Drawing from a June 2025 workshop at IIT Madras, attended by technology leaders from government (Ministry of New and Renewable Energy or MNRE), industry (Adani, Shell, Chevron), startups (Hydrovert, Hylan Power), and academia, this article explores India’s green hydrogen opportunity, the challenges stalling progress, and a bold proposal to catalyze ecosystem transformation.
The Green Hydrogen Imperative
Green hydrogen, produced through electrolysis powered by renewable energy, is central to India’s net-zero emissions goal by 2070. It offers a clean energy carrier and industrial feedstock, enabling decarbonization of sectors resistant to electrification. Beyond domestic needs, green hydrogen positions India for energy exports and leadership in a rapidly growing global market. The International Energy Agency (IEA) underscores India’s structural advantages: low-cost renewable electricity, affordable engineering capabilities, and a burgeoning innovation ecosystem. The National Green Hydrogen Mission (NGHM), launched in 2023, targets 5 million metric tons (MMT) of annual production by 2030, supported by policies to boost electrolyser manufacturing and demand creation.
However, scaling indigenous deep-tech electrolysers, fuel cells, and storage systems remains challenging. India’s reliance on imports, particularly from China, which controls over 70% of global electrolyser manufacturing, exposes it to supply chain risks and price volatility. A September 2024 Council on Energy, Environment and Water (CEEW) report highlights that over 80% of rare earth element (REE) processing and 50% of nickel processing are concentrated in China and Indonesia, underscoring the urgency for resilient domestic supply chains. The workshop at IIT Madras unpacked these challenges, focusing on two critical questions: How can India foster indigenous innovation? And how can promising technologies at Technology Readiness Levels (TRL) 3–5 scale to commercial viability?
Systemic Barriers to Scaling Innovation
The workshop revealed five interconnected barriers preventing India from translating its R&D pipeline into market-ready solutions, each demanding urgent action.
1. Capital & Commercialization Gaps
India’s hydrogen startup ecosystem is vibrant, with technologies achieving lab validation and early pilots. Yet, the “valley of death” between TRL 6 and 9, where prototypes transition to commercial scale, remains a choke point. Hydrogen technologies are capital-intensive, requiring multi-year investment horizons and infrastructure for demonstration. Unlike software startups, which attract venture capital (VC) optimized for quick returns, deep-tech hardware faces a financing mismatch. VC models shy away from the high-CAPEX, long-gestation nature of electrolysers or fuel cells, leaving startups underfunded for certifications, pilot manufacturing, and safety compliance.
First-of-a-kind (FOAK) deployments face a “funding demand deadlock.” Investors demand long-term offtake commitments, while buyers hesitate without cost reductions from scale, which only deployment can achieve. The absence of viability gap funding, conditional offtake guarantees, or risk-sharing instruments, stalls progress. For instance, startups struggle to secure buyers for FOAK projects due to high initial costs, delaying market entry and IP development. The report emphasizes the need for blended, milestone-linked capital, grants, zero-interest loans, or equity, to bridge this gap and de-risk early deployments.
2. Infrastructure & Validation Gaps
Commercializing hydrogen technologies requires rigorous performance validation, safety testing, and real-world demonstration. However, India has limited certified hydrogen labs, modular testbeds, and “hydrogen-safe” demonstration zones. Startups often resort to costly overseas validation services, which delays market readiness and erodes investor confidence. Without domestic facilities to benchmark performance or ensure compliance, innovators struggle to gain customer trust. The absence of modular, technology-agnostic testbeds for alkaline, proton exchange membrane (PEM), or solid oxide electrolysis cells (SOECs) further hampers iteration and durability testing.
Globally, Europe’s Hydrogen Valleys Programme offers a model, providing co-located infrastructure for production, storage, and use, with shared safety protocols and permitting. India’s nascent hydrogen valleys, like those in Kerala and Pune, are steps forward, but lack the scale and integration needed. The report calls for a network of certified labs and demonstration zones within national R&D institutions, equipped with fire safety, compliance monitoring, and emergency protocols to enable risk-mitigated piloting.
3. Regulatory Gaps & Standards Inertia
India’s regulatory frameworks for hydrogen are fragmented and outdated, lacking TRL-specific standards or responsive amendment pathways. Startups developing novel storage or high-efficiency stacks face compliance uncertainty, as early-stage pilots are held to standards designed for mature technologies. Without regulatory sandboxes and flexible frameworks for controlled testing, innovators struggle to secure approvals, and procurers default to established, often imported, solutions. The absence of mechanisms for exemptions or fast-tracked code updates creates a risk-averse environment, stifling innovation.
For example, public procurers hesitate to issue pilot orders without clear certification, while industrial off-takers avoid untested systems due to liability concerns. The report advocates for TRL-based standards, regulatory sandboxes, and a structured interface for code reform to balance safety with innovation, fostering trust and accelerating market access.
4. Evolving Institutional Anchors & Ecosystem Coordination
India’s green hydrogen ecosystem is fragmented, with startups, micro, small, and medium enterprises (MSMEs), academia, and industrial players pursuing parallel efforts. Unlike mature sectors like solar, hydrogen lacks a unified platform to aggregate demand, align stakeholders, or mandate public procurement. The NGHM and centers like IIT Madras drive research, but coordination across the value chain remains limited. Startups lack visibility into demand pipelines, while state agencies are unfamiliar with applications like fuel cell buses or backup power systems.
A central platform could streamline collaboration, reduce duplication, and institutionalize demand creation. Models like Germany’s Fraunhofer Institute or the Indo-German Energy Forum demonstrate how coordinated platforms can support technology commercialization and global market access. The report proposes a mission hub to aggregate public sector undertaking (PSU) offtake, advocate for procurement mandates, and raise awareness of use cases, fostering trust and market maturity.
5. Industrial Competitiveness Constraints
Indian manufacturers face rising input costs, particularly volatile steel prices, and fierce competition from Chinese electrolysers, priced 20-30% lower due to subsidies and scale. Without localization targets or incentives, India risks import dependency, mirroring vulnerabilities in solar supply chains. The absence of domestic content requirements or phased manufacturing roadmaps discourages investment in local R&D and tooling. The report calls for localization-linked procurement, tariff protections, and production-linked incentive (PLI)-type schemes to bolster competitiveness and position India in global supply chains.
A Blueprint for Transformation
The workshop’s key recommendation is a government-anchored, multi-stakeholder platform to accelerate commercial deployment of indigenous hydrogen technologies. This platform could integrate six core functions:
1. Demand Aggregation: Secure PSU and industrial offtake commitments through decarbonization mandates and procurement quotas, prioritizing domestic technologies.
2. Structured Financing: Offer milestone-based grants, loans, and equity for deep-tech hardware, with PLI schemes and FOAK funding to de-risk deployments.
3. Regulatory Enablement: Establish TRL-based standards, regulatory sandboxes, and a working group to streamline approvals and update codes.
4. Shared Infrastructure: Build certified testbeds and pilot plants via MoUs with Council of Scientific & Industrial Research (CSIR), IITs, and PSUs, using government-owned, private-operated models.
5. Technology Qualification: Implement a national TRL certification system, modelled on U.S. consortia like ElectroCat, to validate readiness and monitor progress.
6. Knowledge Hub: Launch an open-access portal for pilot case studies, deployment tracking, and tech transfer, empowering regional hydrogen hubs.
The Path Forward
Green hydrogen is not a distant ambition, but a critical lever for India’s industrial decarbonization, energy security, and global competitiveness. By closing capital, infrastructure, regulatory, coordination, and competitiveness gaps, the proposed platform could unlock India’s R&D pipeline, reduce import reliance, and secure global offtake agreements. With momentum building in hubs like Kerala and Pune, and MNRE’s push for indigenization, India has a narrow window to shift from potential to leadership. This ecosystem transformation promises not just cleaner energy, but a strategic foothold in the multi-billion market, positioning India as a green hydrogen powerhouse by 2030.
This article first appeared in Hydrogen India Newsletter, October 2025 Vol II, Issue 4
Varun Desai
Manager, Xynteo
Milan Kaur
Manager, Xynteo
Bhaskar Jha
Consultant, Xynteo
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