The Confederation of Indian Industry (CII) has urged the government to introduce Green Hydrogen Mandates to catalyze a vibrant domestic green hydrogen economy. While India’s non-fossil fuel installed capacity reached a record 266.78 GW in 2025—a 22.6% increase over the previous year—further progress depends on promoting high-impact technologies like green hydrogen. The CII proposes a phased introduction of Green Hydrogen Blending for sectors such as refining, fertilizer, and natural gas, supported by cost-offset mechanisms to bridge the current economic gap between green and grey hydrogen.
Key Strategic Enablers
Public Procurement Mandates: Encouraging the procurement of green hydrogen-embedded products for housing, railways, and bridges can establish predictable demand. A mandate of 10–15% for infrastructure materials like steel and cement could significantly lower prices through scale.
Industrial Clusters: Developing green hydrogen hubs with shared infrastructure in regions like Gujarat, Maharashtra, Tamil Nadu, and Odisha would allow smaller users, such as MSMEs, to aggregate demand and reduce logistical costs.
Transition Support for Exporters: Targeted fiscal support for steel and chemical exporters is crucial to maintaining competitiveness in carbon-sensitive markets, particularly under the EU’s Carbon Border Adjustment Mechanism (CBAM).
Global Positioning: Strategic bilateral trade agreements with countries like Germany, Japan, and South Korea could help India capture 5–7.5% of projected global import demand.
Fiscal and Regulatory Recommendations
Cost-Offset Mechanisms: Implementation of carbon credit allocations, viability gap funding, and cross-subsidies—such as offering cheaper natural gas when blended with green hydrogen—to reduce the burden on industry.
Deemed Export Status: Granting “deemed export” status to green hydrogen and its derivatives to make them eligible for benefits under existing export promotion schemes.
Standardization: Harmonizing Indian certification standards with international frameworks to simplify trade documentation and boost export bankability.
What is ‘Green Hydrogen Blending’ and how does it bridge the cost gap? It is a transition strategy where a specified percentage of green hydrogen is mixed with traditional grey hydrogen in industrial processes or injected into natural gas pipelines. This approach allows industries to gradually de-carbonize without the immediate requirement of a full technology overhaul. By mandating blending, the government creates a guaranteed market that enables producers to achieve economies of scale, subsequently lowering production costs and making green hydrogen more competitive with fossil-fuel-based grey hydrogen over time.
Policy Relevance
The proposed mandates serve as a critical strategic tool for de-risking private investment and ensuring India’s leadership in the global clean energy transition.
Strategic Impact for India:
Safeguarding Export Competitiveness: Transitioning to green steel and ammonia is vital for preserving India’s access to premium global markets amid rising environmental regulations like CBAM.
Incentivizing Private Investment: Developing globally competitive financial instruments will attract the capital necessary for early-stage, high-potential green hydrogen ventures.
Promoting Inclusive Industrial Growth: Industrial clusters can democratize access to green technology for MSMEs in ceramics, glass, and chemicals, fostering local employment and industrial resilience.
Energy Security: Leveraging the record-breaking growth in non-fossil capacity (adding 49.12 GW in 2025 alone) provides the renewable base required to scale green hydrogen production domestically.
Relevant Question for Policy Stakeholders: How can the government ensure that ‘viability gap funding’ for green hydrogen blending is distributed equitably across sectors to prevent market distortion while incentivizing the fastest possible cost reduction?
Follow the full report here: Greening mandates backed by incentives crucial to spur green hydrogen demand
