India’s Hydrogen Demand Projected to Reach 8.8 MTPA by 2032: IESA Report 

India’s hydrogen demand is projected to rise at a compound annual growth rate (CAGR) of 3%, reaching 8.8 million metric tons per annum (MTPA) by 2032, according to a India Energy Storage Alliance market report released at the 11th edition of the India Energy Storage Week (IESW) 2025 which commenced today at IICC Yashobhoomi, New Delhi

Despite announcements of green hydrogen projects totaling more than 9 MTPA in capacity, the report noted that few initiatives have reached the Final Investment Decision (FID) stage or secured long-term offtake agreements. In a baseline scenario, assuming 30% of the announced green hydrogen capacity is commissioned within the next decade, supply from electrolytic and bio-hydrogen sources could meet only 31% of the projected domestic demand by 2032.

The report highlights that most of the announced green hydrogen capacity is concentrated in four states: Odisha (38%), Gujarat (26%), Karnataka (12%), and Andhra Pradesh (6%). Furthermore, 72% of these projects aim to use green hydrogen for ammonia production, while 20% have yet to declare end-use applications.

The Levelized Cost of Hydrogen (LCOH) remains a key barrier. LCOH refers to the average cost of producing one kilogram of hydrogen over the lifetime of a production facility, accounting for all relevant costs.

Hydrogen produced via water electrolysis in India currently costs two to four times more than hydrogen produced from fossil fuels. Even in an optimistic scenario, the cost remains 1.5 to 2.5 times higher. Additionally, open-access electricity regulations often limit renewable energy usage for commercial and industrial customers, affecting electrolyzer capacity utilization.

According to the report, the major cost drivers for LCOH include landed electricity cost, capital expenditure on electrolyzer systems, and plant utilization rates.

India’s National Green Hydrogen Mission (NGHM) has already seen the announcement and bidding of several schemes, including subsidies under Green Hydrogen (GH2) Tranches 1 and 2, electrolyzer manufacturing (ELY Tranches 1 and 2), and green ammonia tenders under the Strategic Initiative for Green Hydrogen Transition (SIGHT).

Dr. Ajay Mathur, former Director General of the International Solar Alliance and Professor at IIT Delhi emphasised IESW’s role in fostering collaboration across sectors: “IESW 2025 embodies the collective aspirations of the battery and storage communities, enabling knowledge exchange and sector-wide innovation.”

Vinayak Walimbe, Managing Director, CES noted that while policy initiatives have driven momentum, significant hurdles remain. “The IESA India Hydrogen Report is critical in highlighting gaps and helping policymakers and industry leaders align efforts toward decarbonisation,” he said.

Debmalya Sen, President, IESA, reiterated the importance of industry-government synergy. “IESW 2025 will pave the way for India’s shift to a resilient energy system, supporting our goal of achieving a green hydrogen production capacity of 5 MTPA by 2030,” he said.

The three-day IESW 2025 event will feature participation from ministries, government representatives, and companies across more than 20 countries. It will serve as a launch platform for over 300 new innovations spanning EVs, charging infrastructure, green hydrogen, solar, and advanced energy storage solutions. At least seven major factory or product announcements are also expected from leading Indian manufacturers.

The India Energy Storage Alliance (IESA) is a leading industry body promoting the adoption of energy storage, e-mobility, and green hydrogen in India. It engages with policymakers, industry leaders, and research organisations to drive market transformation through advocacy, business development, and thought leadership.