As India prepares for Union Budget 2026, the Confederation of Indian Industry (CII) has called on the government to introduce clear green hydrogen mandates and targeted incentives to accelerate demand and strengthen India’s clean energy transition. Industry leaders believe that a well-defined policy framework in the upcoming Budget can transform green hydrogen from a pilot-stage solution into a commercially viable pillar of India’s energy and industrial strategy.

Why Green Hydrogen Matters for India

Green hydrogen, produced using renewable energy sources such as solar and wind, is increasingly viewed as a critical tool for decarbonising hard-to-abate sectors like steel, cement, fertilisers, refineries, and heavy transport. With India aiming to achieve net-zero emissions by 2070, green hydrogen can significantly reduce dependence on fossil fuels while improving energy security and lowering import bills.

India’s National Green Hydrogen Mission has already set ambitious production and export targets. However, industry stakeholders argue that demand-side clarity and long-term policy certainty are essential to scale up investments and infrastructure.

CII’s Key Recommendations

CII has urged the government to focus on the following areas in Budget 2026:

• Mandatory Usage Targets: Introduce phased green hydrogen consumption mandates for sectors such as refineries, fertilisers, and steel to create assured demand.

• Fiscal Incentives: Extend production-linked incentives (PLI), viability gap funding, and tax benefits to reduce the cost gap between green hydrogen and conventional fuels.

• Infrastructure Support: Allocate higher capital spending for electrolyser manufacturing, hydrogen pipelines, storage facilities, and port-based export infrastructure.

• Policy Stability: Provide long-term clarity on pricing mechanisms, carbon credits, and renewable power availability to attract domestic and global investors.

Boost to Manufacturing and Jobs

A robust green hydrogen policy could also strengthen India’s manufacturing ecosystem, particularly under the “Make in India” and “Atmanirbhar Bharat” initiatives. Domestic production of electrolysers, fuel cells, and related components can create new supply chains, generate skilled employment, and position India as a global hub for green hydrogen technology.

Strategic Opportunity Ahead of Budget 2026

With global economies accelerating their shift toward clean energy, India has a narrow but significant window to establish leadership in green hydrogen. CII believes Budget 2026 can act as a turning point by aligning climate goals with industrial growth, exports, and energy independence.

If the government adopts these recommendations, green hydrogen could move from policy ambition to commercial reality—supporting India’s long-term economic growth while advancing its sustainability commitments.