India is becoming supply-ready, yet the market is still demand-constrained. The next phase will be won not by who announces the biggest project, but by who can convert ambition into bankable, executed deployments.
India’s green hydrogen journey has moved from “idea” to “activity.” Over the last couple of years, the country has seen a wave of project announcements, early pilots, and growing interest from manufacturers. But as the dust settles, a clear picture is emerging: India is becoming supply-ready, yet the market is still demand-constrained. The next phase will be won not by who announces the biggest project, but by who can convert ambition into bankable, executed deployments.
A large pipeline, small conversion into real projects
On paper, India’s green hydrogen pipeline looks massive. Over 380 projects have been announced, adding up to about 13 million tons of planned capacity. Yet execution is still thin. Only around 35 projects are currently under implementation, and more than 90% of these are demonstration projects, valuable for learning, but not the same as large-scale commercial deployment1.
Even within these projects, the capacity being built is a small slice of what has been announced: roughly 230+ kilotons of hydrogen production is under implementation, which is around 2% of the total announced volume.
This does not mean the market is failing. It simply reflects a typical early-stage pattern: first comes enthusiasm and announcements, then comes the harder work of customer contracts, permits, engineering, financing, and infrastructure.
Supply chains are forming ahead of demand
One of the most positive signs is the speed at which the industrial ecosystem is taking shape. Electrolyser and fuelcell manufacturers are preparing for scale, with more than a dozen electrolyser original equipment manufacturers (OEMs) already visible. New entrants and large industrial groups are entering the space, and several are planning manufacturing capacity, even though demand is not fully predictable yet.
The ecosystem is also expanding beyond electrolysers. Hydrogen truck development pilots are underway with major vehicle manufacturers, and storage players are adapting existing technologies for hydrogen use.
The core insight here is important: manufacturing is scaling up before demand is certain. That can be a strength—India builds capabilities early and reduces dependence on imports. But it can also create risk – If demand grows slowly, manufacturers could end up with underused capacity, weakening margins and slowing future investments.
Demand and infrastructure remain bottlenecks
What is holding the market back is not the basic ability to produce hydrogen. It is the market pull needed to justify big investments.
Right now, there are limited announcements of truly largescale demand in hard-to-abate sectors such as green steel, heavy trucking, chemicals, and broad pipeline-enabled industrial use. Without anchor buyers and long-term contracts, hydrogen developers are hesitant to commit to final investment decisions at scale.
Infrastructure is the other missing piece. Hydrogen requires systems for transport, storage, and handling. Shared pipelines, storage hubs, and port infrastructure will be essential to reduce costs and support scale. Until these are in place, projects remain fragmented and expensive.
Policy support is strong but competition is intense
Policy actions have played a critical role in kickstarting the sector. Incentives, auctions, and early demand-creation mechanisms have helped projects take shape and improved visibility for some segments.
However, intense competition is creating new risks. With a large number of developers (100+)2 chasing limited early opportunities, price bids are becoming aggressive. Some projects are being proposed without sufficient technical and financial groundwork, increasing execution risk.
Technology is progressing, but execution readiness matters more
Public sector pilots have helped validate early technologies, from fuel-cell applications to integrated hydrogen production systems. Private players are now building on this foundation, often partnering with global technology providers for initial deployments.
In short, the technology works. The next challenge is scaling it commercially through better standards, testing infrastructure, financing frameworks, and procurement pathways.
Capital is shifting toward long-term, patient money
Green hydrogen projects are capital-intensive and infrastructure-heavy. That means the next phase will be shaped by long-term investors, blended finance, and patient capital rather than short-term venture/promoter equity funding alone.
Four actions to unlock scale
- Create bankable demand through mandates in fertilizers, refining, steel, and heavy transport, supported by longterm offtake agreements.
- Accelerate shared infrastructure such as pipelines, storage facilities, and port systems.
- Improve project bankability through blended finance, risk-sharing mechanisms, and clear policy timelines.
- Stabilize manufacturing and the supply chain by linking incentives to deployment and supporting early utilization.
The bottom line
India’s green hydrogen ecosystem is taking shape quickly. Manufacturing readiness is improving, early pilots have demonstrated viability, and policy is pushing in the right direction. But the path to scale now depends on predictable demand, shared infrastructure, and financing that matches real-world risk.
1 https://nghm.mnre.gov.in/project?language=en
2 https://nghm.mnre.gov.in/project?language=en
This article first appeared in Hydrogen India Newsletter, March 2026 Vol III, Issue 2
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