Background
India has taken a major leap in its green energy mission with the successful discovery of its official green hydrogen price through a reverse auction conducted by Indian Oil Corporation Ltd. (IOCL). This marks a pivotal moment under the National Green Hydrogen Mission (NGHM), supporting India’s long-term decarbonization objectives and enhancing its stature as a key global green hydrogen hub. On 6 June 2025, a price of ₹397.33 per kilogram was discovered—the transparent market-based benchmark for green hydrogen in the country. This price reflects significant progress toward commercializing green hydrogen and enabling demand aggregation under the Ministry of New and Renewable Energy (MNRE)’s Strategic Interventions for Green Hydrogen Transition (SIGHT) Scheme – Component II.
Ecosystem Evolution and Forward Momentum
India’s green hydrogen ecosystem has evolved rapidly over the past few years. Before 2021, green hydrogen was largely conceptual with negligible production. Hydrogen usage was limited to grey hydrogen (from fossil fuels), and no structured policy existed. The 2023 launch of NGHM provided the much-needed institutional push. As of 2025, the ecosystem includes price discovery, early industrial projects, and viability gap funding mechanisms. Looking ahead, India targets 5 million metric tonnes (MMT) of green hydrogen production by 2030, domestic electrolyzer manufacturing, and becoming a leading green hydrogen exporter to the EU, Japan, and other markets.
Reverse Auction Mechanism and Benchmark Price Formation
IOCL conducted a reverse auction under SIGHT Component II, which focuses on demand aggregation and strategic procurement. Major participants included Reliance Industries Ltd., ACME, Avaada, and Greenko. Reliance emerged as the lowest bidder at ₹397.33/kg, a price much lower than earlier estimates ranging between ₹500 and ₹600 per kilogram. This reverse bidding format encouraged competitive pricing and ensured transparent discovery, offering a clear and credible benchmark for green hydrogen pricing in India.
Policy Backing and Regulatory Enablers
The auction and subsequent price discovery were made possible by MNRE’s proactive interventions under the National Green Hydrogen Mission, launched in 2023 with a budget of ₹19,744 crore. The SIGHT Scheme provided structured incentives for production and demand aggregation. Additionally, the Central Electricity Authority (CEA) issued new grid norms in 2024 to facilitate connectivity and compliance for hydrogen projects. Although green hydrogen is not yet governed by a dedicated statute, it benefits from cross-sectoral policy synergy between energy, industry, and climate-related departments, reinforcing India’s long-term vision for a decarbonized economy.
Global Positioning and Cost Competitiveness
India’s discovered price of ₹397.33 per kilogram is highly competitive on the global stage. In the European Union (EU), production costs typically range from €5 to €7 per kilogram (equivalent to ₹450 to ₹630), even after accounting for subsidies under REPowerEU and the Hydrogen Bank. Middle Eastern and Australian producers estimate costs between USD 3 and 5 per kilogram, although long-distance shipping adds significant overhead. In contrast, India’s low-cost renewable energy base, affordable labor, and supportive policy measures have helped achieve a production cost of approximately USD 4.75 or €4.40 per kilogram, placing the country among the most cost-effective green hydrogen producers globally.
Industrial Uptake and Market Confidence
The successful price discovery has catalyzed widespread interest across India’s energy and industrial sectors. Public sector undertakings like IOCL, BPCL, and ONGC are exploring hydrogen integration in mobility and refining operations. Steel and fertilizer manufacturers are evaluating green hydrogen-based direct reduced iron (DRI) processes. Investors, including sovereign wealth funds and climate-focused financiers, are increasingly confident in the bankability of hydrogen-linked infrastructure. The benchmark price has provided clarity for project developers, improving the prospects for long-term offtake agreements and commercial partnerships.
Strategic Relevance and Economic Multiplier Effects
This development is significant not only for India’s energy transition but also for its economic future. By reducing dependency on imported fossil fuels and lowering greenhouse gas emissions, India enhances its energy security and environmental sustainability. The initiative also supports the “Make in India” campaign through local manufacturing of electrolyzers and other green equipment. Importantly, it opens up export opportunities to hydrogen-deficient regions such as the EU, Japan, and South Korea. The discovered price sets a reliable benchmark for future auctions and helps build a robust commercial framework around green hydrogen.
Roadblocks and the Path to Maturity
Despite the positive momentum, several challenges remain. Electrolyzers, a core component in green hydrogen production, remain capital-intensive and require indigenous manufacturing at scale to drive costs down. Regulatory gaps also persist, as a comprehensive and unified green hydrogen law is still awaited. Infrastructure development, especially for transport, storage, and blending systems, is currently inadequate and must be urgently scaled to meet growing demand. However, these hurdles are transitional and are expected to diminish as technology matures, economies of scale improve, and policy frameworks evolve.
Conclusion
India’s green hydrogen price discovery at ₹397.33 per kilogram marks a watershed moment in its clean energy journey. It validates the effectiveness of the country’s green policy architecture and signals the readiness of its market to scale sustainably. In comparison with global peers, India stands not just as a participant but as a potential leader in the green hydrogen economy. With continued regulatory innovation, international collaboration, and domestic demand alignment, India is well-poised to drive the global green hydrogen transition forward.
