India's renewable hydrogen sector enters 2026 with rising momentum but also increased pressure to convert its ambitions into bankable projects. This is shaping up to be a decisive year during which it must close regulatory gaps, clarify subsidy rules and accelerate infrastructure upgrades to avoid further delays to production targets.
New Delhi has concluded several subsidy tenders, underlining its ambition to position India as a global hub for renewable hydrogen and derivatives. But progress on the ground remains slow. Officials now concede that the original target of producing 5mn t/yr of renewable hydrogen by 2030, first set in 2022, is unrealistic.
The government has lowered expectations to 3mn t/yr by 2030 and pushed back the 5mn t/yr milestone to 2032. It blames the delay on factors out of its control, such as shifting EU policy signals and the International Maritime Organisation's (IMO) October decision to postpone a vote on its net-zero framework. But developers point also to domestic issues such as regulatory bottlenecks, uneven grid access and slow progress on securing offtake agreements.
India's latest renewable ammonia tender, for which auctions were concluded in August, still faces unresolved details and outstanding questions, leaving significant work needed before implementation. Letters of award have been issued, but producers still need to sign supply agreements with state-owned Solar Energy Corporation of India (SECI), which will then execute sales contracts with fertilizer companies. These agreements were initially expected by the end of this year but are now likely to be delayed by several months into 2026. The main obstacle is that the payment security mechanism — a financial safeguard — still lacks critical detail, including whether it guarantees full recovery of payments in case of buyer default, repayment timeline and the funding source. There is also no clarity on who will cover the cost gap between fossil-based and renewable ammonia.
And momentum has stalled on India's planned green methanol tender. Authorities had originally aimed to launch the tender in March 2026, but the timeline has been pushed back after the IMO deferred its net zero framework vote. India's ports will play a leading role in aggregating demand, with Deendayal Port in the western state of Gujarat positioning itself as a future hub. The port plans to invite expressions of interest soon for projects totalling about 150,000 t/yr of e-methanol production capacity.
Powering up
Beyond policy, India faces structural challenges in its power sector. The government's 5mn t/yr hydrogen target would require roughly 125GW of additional renewable energy capacity. While India's renewable energy buildout, particularly for solar, has accelerated, transmission infrastructure has not kept pace. Developers cite inadequate grid buildout and missing last-mile connectivity for hydrogen and ammonia projects as some of the hurdles that need to be overcome.
Greater alignment among states is also needed. A patchwork of rules, fees and levies is inflating project risks and complicating electricity delivery from renewable assets to hydrogen production sites. These uncertainties are adding to pressure on projects that are already racing against subsidy-linked timelines.
Some developers are pressing ahead and winners of the first renewable hydrogen tender are targeting offtake agreements and final investment decisions (FIDs) in 2026, ahead of a 2027 commissioning deadline. But most projects are not expected to stay on schedule.
Slow progress is also putting electrolyser manufacturers under strain and threatening their eligibility for government support. Many renewable hydrogen projects remain in early development and are a long way from placing equipment orders, leaving manufacturers that won government subsidies in a difficult position. Companies that were awarded support in the first electrolyser tender must commission their factories by August 2026, but several warn they may need to delay commissioning because orders are not yet materialising. Manufacturers have asked for a solution, but the government has yet to clarify whether it will extend the timelines.
Turning points
These challenges mean the year ahead will be critical for turning India's early policy initiatives into tangible progress. The government must resolve subsidy and payment security gaps, accelerate grid strengthening, harmonise inter-state regulatory inconsistencies and help developers lock in offtake agreements that can support financing.
India's renewable hydrogen sector has retained its momentum, but 2026 will determine whether that momentum translates into project FIDs and construction — or whether timelines are stretched further into the next decade.
