Green hydrogen in India: New opportunities for deep tech startups

India's ambitious push into green hydrogen production is creating substantial opportunities for domestic deep-tech startups, with companies like Newtrace demonstrating how innovative engineering can address cost barriers that have limited clean hydrogen adoption.

The government's National Green Hydrogen Mission, launched in January 2023 with close to Rs. 20,000 crore in funding, aims to produce five million tonnes annually by 2030. Recent policy developments have accelerated this timeline. Budget 2024-25 increased the mission's allocation to Rs. 600 crore from Rs. 100 crore the previous year, while an additional $43 million was allocated for research and development in September 2025.

This government backing has translated into concrete market activity. The Solar Energy Corporation of India awarded contracts for 412,000 tonnes of annual green hydrogen production capacity and 1,500 MW of electrolyser manufacturing in early 2024. GAIL commissioned India's first commercial green hydrogen plant in Madhya Pradesh in May 2024, producing 4.3 tonnes daily.

The funding environment reflects growing investor confidence in the sector. State-level policies now embed approximately Rs. 5 lakh crore in incentives, representing 26 times the National Green Hydrogen Mission's budget. Private investments in active green hydrogen projects have reached $80 billion, according to industry estimates.

Against this backdrop, Bengaluru-based Newtrace has developed technology that eliminates one of the most expensive components in hydrogen production. Co-founders Prasanta Sarkar and Rochan Sinha, who met at Entrepreneur First in 2020, created electrolysers that remove the membrane entirely, using water flow to separate hydrogen and oxygen gases.

Traditional industrial electrolysers require membranes that must be highly selective for ions while remaining chemically stable and durable. These specialized polymers and advanced materials are costly to manufacture. Sarkar, who holds a PhD in fluid mechanics from Université Grenoble Alpes, and Sinha, a J.N. Tata fellow with expertise in nanomaterials and electrochemistry, developed their approach after extensive work in renewable energy systems in Europe.

“There are only three other companies in the world that offer this technology,z’ Rajan Anandan, managing director at Peak XV Partners, which led Newtrace's seed funding round alongside Aavishkaar Capital, said in an interview with Forbes India last year. The startup's approach reduces manufacturing costs by 30 percent and eliminates the need for rare earth metals.

Newtrace has demonstrated its technology through a near-commercial prototype and operates a 20MW pilot facility. The company is building its order book for 1MW electrolyser systems, with commercial deployment expected by 2025. Plans include scaling to 5MW and 10MW capacity products.

The startup targets industrial customers, particularly refineries and steel plants, where hydrogen is already used but produced from fossil fuels. This approach addresses existing demand rather than creating new markets. Currently, India produces 6-7 million tonnes of hydrogen annually, almost entirely from fossil fuel sources.

Newtrace bid for 30MW capacity in a recent government tender for electrolyser manufacturing, competing against established domestic conglomerates and international companies. The company has established partnerships with the Dutch Institute for Fundamental Energy Research and presented its technology at Stanford University.

The government has announced a Rs. 100 crore scheme supporting hydrogen technology startups, offering up to Rs. 5 crore per pilot project. This funding targets innovation in production, storage, transportation, and utilization technologies.

India's green hydrogen sector represents a test case for whether domestic deep-tech companies can compete with established international manufacturers. Success depends on execution speed, technology validation, and the ability to scale manufacturing while maintaining cost advantages. For startups like Newtrace, there is a window of opportunity for establishing its presence in the market, even as both domestic conglomerates and global players increase their commitments to the sector.

The combination of government support, growing industrial demand, and innovative domestic technology creates conditions for Indian deep-tech startups to establish meaningful positions in the emerging hydrogen economy.