This follows SECI's announcement in March that fertiliser companies and local suppliers, including clean energy solution company ACME Cleantech and NTPC Green, ​had signed offtake agreements for 724,000 tons of green ammonia — a ​derivative of green hydrogen — which could cover one third of the ⁠country's requirements of the low-carbon fuel.

The 1-million-ton supply proposal will be based ​on tenders only, SECI's Akash Tripathi said.

India's fertiliser sector uses about 20 million ​tons of grey hydrogen annually, imported or produced from imported natural gas, Tripathi said at a Confederation of Indian Industry event on Friday, whose supplies have been disrupted by the Iran ​war.

Hydrogen extracted using renewable power such as solar is "green" while grey hydrogen ​is extracted from coal or natural gas using steam-methane reforming.

Backed by incentives worth about $2.1 billion, India ‌aims ⁠to produce 5 million tons of green hydrogen by 2030 in a quest to decarbonise industries and ensure its energy security. Its push comes as several Western countries have scaled back ambitious green hydrogen goals from the start of ​this decade on ​cost constraints and ⁠slower-than-expected demand growth.

India has brought the price of producing green hydrogen as low as 279 Indian rupees (around $3) per kilogram, from ​around $5 per kilogram in 2023, when the government launched its ​National Green ⁠Hydrogen Mission.

Under the initiative, industrial heavyweights including Larsen & Toubro (LART.NS), Bharat Petroleum Corp (BPCL.NS), GAIL (GAIL.NS) and JSW Steel (JSTL.NS) produce about 8,000 tons of green hydrogen and its derivatives annually. ⁠SECI ​pools demand and secures supplies.

Tripathi said SECI was ​also preparing green methanol tenders targeted at the domestic market and expected to issue them within the ​next two months.

($1 = 95.2300 Indian rupees)