India is rationalising the Goods and Services Tax (GST) structure across key sectors to reduce complexity for businesses and boost consumption. One of the biggest beneficiaries of this move is the automotive sector, where the government has reduced the GST by up to 13% on ICE vehicles, by up to 10% on hybrid vehicles, and by up to 7% on fuel cell vehicles.
Previously, India levied a 12% GST on fuel cell vehicles, which was up to 38% lower than on ICE vehicles, subject to up to 28% GST and a compensation cess of up to 22%. Now, the government has set the GST on fuel cell vehicles at 5%, giving them the same preferential treatment as BEVs. This parity indicates a growing role for hydrogen in the country’s electrification strategy. ICE and hybrid vehicles now attract between 18% and 40% GST.
Unlike BEVs, which accounted for 2.4% of car sales and 6.1% of two-wheeler sales in 2024, hydrogen FCEVs are not yet commercially available in India. The government and private players are conducting pilot projects with passenger and commercial hydrogen FCEVs to evaluate their feasibility under local climatic conditions and with the available refuelling infrastructure.
In 2019, Toyota Kirloskar Motor (TKM), the Japanese automaker’s Indian joint venture, imported the first-gen Mirai and demonstrated it to several government officials, including Nitin Gadkari, the Minister of Road Transport & Highways. In 2022, the company imported the second-gen Mirai and collaborated with the International Center for Automotive Technology (ICAT) for local testing. Gadkari inaugurated the pilot project and occasionally uses the latest model for official travel to promote the technology. TKM also supplied the second-gen Mirai for R&D purposes to the Sree Chitra Thirunal College of Engineering in the southern state of Kerala for three years.
Hyundai started showcasing the Nexo in India just one month after its world premiere in 2018. Just like Toyota’s Mirai, however, the model still has not arrived in showrooms. A few weeks after the second-gen Nexo’s world premiere in April this year, Hyundai began road trials of the first-gen model in India under a tie-up with Indian Oil. The partners plan to test the original Nexo over an estimated distance of 40,000 km by 2027.
In the commercial segment, companies have explored hydrogen FCEVs for well over a decade and are in advanced stages of commercialisation. In 2013, Tata Motors developed India’s first hydrogen fuel cell electric bus in partnership with the Indian Space Research Organisation (ISRO). Since 2023, the company has deployed 15 hydrogen fuel cell 12-metre electric buses in partnership with Indian Oil in Delhi. It is now exploring hydrogen ICE technology as well.
In March this year, Tata Motors launched India’s first pilot project of hydrogen-powered heavy-duty trucks. It will test 16 units of H2-ICE and H2-FCEV heavy-duty trucks for up to two years on the country’s key freight corridors, including those around Delhi-NCR, Jamshedpur, Kalinganagar, Mumbai, Pune, Surat, and Vadodara.
The initiative is part of India’s National Green Hydrogen Mission (NGHM), under which the government has sanctioned five new pilot projects comprising 37 hydrogen-powered buses and trucks—15 fuel cell-based and 22 ICE-based—as well as nine refuelling stations. The government expects the participating companies to commission these projects by March 2027. It has provided six billion rupees (approximately 58 million euros) in grants to accelerate the development of hydrogen infrastructure. NGHM expects more than 1,000 hydrogen trucks and buses to be on Indian roads by 2030.
Ashok Leyland is also actively pursuing hydrogen FCEVs along with hydrogen ICE vehicles. In 2023, the company supplied five hydrogen fuel cell electric buses to National Thermal Power Corporation (NTPC) for use in Ladakh, a high-altitude union territory in northern India. It has also supplied three hydrogen fuel cell electric trucks to Adani. Like Tata Motors, it is involved in the government’s new plan to deploy 37 hydrogen-powered vehicles in India.
pib.gov.in
