Exploring potential of trade in green hydrogen for India and an analysis of financial incentives under national green hydrogen mission

Countries across the globe are acknowledging their commitments towards climate change mitigation and taking steps in furtherance of the same. Clean energy transition is one of the means and objectives of action against climate change. India, too, launched the National Green Hydrogen Mission to make India the Global Hub for the production, usage and export of Green Hydrogen and its derivatives. Consequently, financial incentives under the mission have been launched to encourage the domestic manufacturing of electrolysers and the production of green hydrogen. In this article, I analyse how the green hydrogen trade holds the potential to strengthen India’s geoeconomic position. However, a mandatory local value—addition requirement under the incentive scheme is counterproductive. Instead, India should focus on strengthening backward linkages in a global value chain to secure the supply of critical minerals necessary for the manufacturing of electrolysers. I argue that India should not focus on boosting the manufacturing of electrolysers through trade protectionism but instead push green hydrogen production in an open and competitive economy.