The Confederation of Indian Industry (CII) has urged the government to introduce strong green hydrogen mandates to stimulate demand and strengthen India’s standing in the global clean energy market.
In a detailed proposal released in New Delhi, the industry body said mandatory blending requirements for high-demand sectors such as oil refining, fertilisers and natural gas are crucial to narrowing the cost gap between conventional grey hydrogen and cleaner green hydrogen. According to CII, such mandates would give producers long-term market certainty and help reduce costs as production scales up.
To ease the financial impact on businesses and consumers, CII recommended a phased rollout backed by innovative support mechanisms. These include awarding carbon credits for avoided emissions, providing viability gap funding and adopting cross-subsidisation models. In the fertiliser sector, for instance, lower-priced natural gas could be offered in return for green hydrogen blending. The push follows a milestone year in 2025, when India’s non-fossil fuel installed capacity rose to more than 266 GW.
CII Director General Chandrajit Banerjee said India should build on its clean energy momentum after a record year in 2025, when non-fossil fuel capacity reached 266.78 GW. He noted that this marked a 22.6 per cent increase over 2024, with 49.12 GW of new non-fossil capacity added to the existing 217.62 GW. “The next phase of growth will come from promoting key technologies such as green hydrogen,” he said.
Beyond industrial mandates, CII is also advocating changes in public procurement policy. It has proposed that 10 to 15 per cent of materials used in public infrastructure projects—including steel, cement and ammonia for bridges and railways—should be sourced from green hydrogen-based production. This, the industry body said, would create a stable and bankable demand pipeline for producers. The proposal also calls for the development of green hydrogen clusters in states such as Gujarat, Maharashtra, Tamil Nadu and Odisha, enabling smaller users, including MSMEs in ceramics and chemicals, to pool demand and share infrastructure costs through public-private partnerships.
At the international level, CII is encouraging the government to position India as a leading exporter, targeting a 5 to 7.5 per cent share of the expected global import market. Achieving this would require bilateral trade agreements with countries such as Germany, Japan and South Korea, along with harmonised certification standards. Granting “deemed export” status to green hydrogen derivatives would further boost competitiveness.
The proposal also stresses the importance of targeted support for steel and chemical exporters to help them comply with global carbon regulations, including the European Union’s Carbon Border Adjustment Mechanism. Such measures, CII said, would keep Indian exports competitive in carbon-conscious premium markets while drawing much-needed private investment into early-stage green hydrogen projects.
