India - The New Global Green Hydrogen Powerhouse?

Abstract

India aims to become a leading powerhouse in green hydrogen production by the next decade as part of a broader industrial strategy to achieve a $5 trillion GDP economy by 2028. Hence, India must develop new approaches to produce vast amounts of green energy at affordable prices to support its economic development, growing population, and carbon reduction targets. Neither the public nor the private sectors can address these challenges alone, and technological innovation must increasingly play a role. To achieve its ambitious goals, New Delhi must incentivize the creation of fully-fledged green hydrogen industrial value chains (such as fertilizers and steel), which includes scaling up domestic electrolyzer manufacturing capacity.1 This strategy will avoid the inefficiencies and mistakes of the past, during which dependence on foreign manufacturing (i.e., Chinese solar technology) undermined the country’s ability to deploy robust industrial clean technology value chains at scale. To accelerate the development and deployment of hydrogen value chains, the Indian Government must design appropriate incentives to drive adoption while supporting workforce development. However, our research demonstrates how land availability, water scarcity, and infrastructure challenges could limit India’s ability to become a green hydrogen export champion.2 These factors would require India to produce hydrogen in less densely populated areas and efficiently transport it to demand or export centers. However, these regions also face higher infrastructure gaps.3 Successfully tackling these hurdles while establishing a business-friendly regulatory framework - to mobilize the necessary private investments - would allow India to corner new green hydrogen markets connecting the Middle East, Europe, and other key countries in the Global South. As witnessed during the G20 presidency, India could pioneer a new economic development model based on technological innovation, thereby side-stepping the carbon-intensive approaches of the past. Accelerating the transition to a low-carbon economy should not be perceived as a risk hindering growth but as an opportunity to reduce socioeconomic imbalances and achieve industrial leadership. Is India ready?