India’s push to develop a domestic electrolyser manufacturing industry is facing a demand-related challenge. Although several companies have announced manufacturing capacity to support the country’s green hydrogen ecosystem, slower-than-expected orders from project developers are forcing manufacturers to postpone plant commissioning. Several companies had planned to establish production facilities ahead of anticipated demand. However, as green hydrogen projects progress more slowly than expected, manufacturers are now seeking additional time before starting commercial operations.
Manufacturers Push Commissioning to August 2027
Nearly half a dozen companies, including Reliance Electrolyser Manufacturing, Adani New Industries, Homi Hydrogen and John Cockerill Greenko Hydrogen Solutions, are understood to have deferred the commissioning of their electrolyser manufacturing facilities to August 2027 from the earlier target of December 2026. The Ministry of New and Renewable Energy (MNRE) has reportedly approved the extension, allowing these companies to remain eligible for incentives under the Production-Linked Incentive (PLI) scheme.
The revised timeline gives manufacturers greater flexibility to secure confirmed customer orders before commencing operations. Companies with firm commitments can still start production earlier, while others can wait for market demand to strengthen. This approach is particularly important because the initial years of the PLI programme offer higher incentive payouts. Starting production too early, without sufficient orders, could reduce the financial benefits available to manufacturers.
High Investments Add to Financial Pressure
Electrolyser manufacturing requires substantial capital investment. Industry estimates suggest that setting up a manufacturing facility could cost between ₹50 crore and ₹100 crore, depending on land prices and other site-specific requirements. Several companies have already invested in land, buildings and manufacturing equipment. Some have also started servicing loans taken to establish their facilities.
Consequently, postponing commissioning does not eliminate financial obligations. Instead, it delays revenue generation while companies continue to bear interest and other carrying costs. The PLI extension provides operational flexibility but does not offer immediate financial relief. Manufacturers can claim incentives only after securing orders, producing electrolysers that meet domestic value-addition and energy-consumption requirements, and supplying and commissioning the equipment for customer projects.
Green Hydrogen Projects Yet to Generate Firm Orders
Although developers have secured projects under the government’s broader green hydrogen programme, many projects have yet to achieve financial closure or translate into confirmed procurement orders for electrolyser suppliers. Industry executives identify this gap between project awards and actual equipment procurement as a major reason behind the manufacturing delays. Without firm purchase orders or assured demand, manufacturers risk operating their facilities below capacity or leaving production lines idle. Meanwhile, interest payments and other operational expenses could increase financial pressure.
Slow Project Execution Challenges Industry Growth
The slower pace of green hydrogen project development has also affected the wider industrial ecosystem. Green hydrogen is expected to play an important role in decarbonising sectors such as oil refining, fertilisers, shipping fuels and heavy industries. However, translating government policies and investment commitments into operational projects remains a challenge. For electrolyser manufacturers, the immediate priority is therefore not just developing manufacturing capabilities but also securing customer commitments and ensuring project execution.
As reported by etsustainability.com, the extension to August 2027 gives India’s electrolyser manufacturers additional time to align production capacity with market demand. However, the sector’s growth will ultimately depend on how quickly green hydrogen projects achieve financial closure, generate firm equipment orders and move towards commercial operations.
