Gujarat is positioned as a critical hub for renewable hydrogen development in India, as highlighted by a recent report from S&P Global. The state’s advantages stem from its significant refinery and ammonia capacity, abundant renewable energy resources, numerous ports, and an effective state-level incentive framework. These elements collectively foster an environment conducive to long-term growth in renewable hydrogen capabilities.

Approximately 40 per cent of India’s refinery capacity and nearly 30 per cent of its ammonia production are based in Gujarat. Additionally, the state boasts around 50 gigawatts of combined solar and wind energy. With at least 40 per cent of the country’s maritime trade passing through its ports, Gujarat presents strong potential for both domestic hydrogen demand and related infrastructure development.

The state’s Energy and Petrochemicals Department has formalised its hydrogen strategy, setting production targets and offering financial support to kickstart initial projects. Certain incentives, including substantial capital subsidies for electrolyser components, battery storage, oxygen collection, and desalination facilities, have been outlined in the policy.

Aspiring Production Goals and Policy Support

Gujarat aims for a renewable hydrogen production target of 3 million metric tonnes annually by 2035, a goal that stands as the highest among the Indian states assessed in the S&P report. However, the ambitious nature of this target warrants caution, as much of the infrastructure within the state remains in preliminary stages of development.

While Gujarat leads in the number of projects at advanced stages compared to other Indian states, competitors such as Andhra Pradesh and Odisha showcase larger capacities in that same category. Although the state’s initiatives are promising, many large-scale projects are still being evaluated for feasibility, despite indications that they may move forward by leveraging recent backing from India’s Strategic Interventions for Green Hydrogen Transition (SIGHT) programme.

At the national level, the government’s National Green Hydrogen Mission aims for an annual production of 5 million metric tonnes of renewable hydrogen by 2030. The SIGHT programme has received an initial funding allocation of Rs 170 billion to support projects across the hydrogen value chain.

International Hydrogen Trade and Export Competitiveness

S&P Global also emphasised India’s increasing participation in the global hydrogen market. Indian developers were responsible for 40 per cent of the volume of renewable hydrogen and affiliated offtake agreements signed between 2024 and 2025, a figure projected to rise to 80 per cent for transactions completed in the early months of 2026.

Gujarat’s location along the west coast may provide strategic advantages for supplying European markets, particularly through ammonia exports. However, fierce competition from regions such as the Middle East and China highlights the necessity of both state and federal support to enhance export competitiveness. This dynamic will play a crucial role in shaping the future of hydrogen development in Gujarat.

The combination of local industrial demand, renewable energy resources, port facilities, and supportive policies positions Gujarat as an attractive site for developing renewable hydrogen projects. This strategic framework is expected to help harness the growing international demand for hydrogen, paving the way for the state to become a prominent player in the global energy landscape.

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