The Scrapping of Assam’s Green Hydrogen Initiative: Political Economy, Social Economy and the Future of Advantage Assam

In February 2025, Assam announced the Integrated Clean Energy Policy, a flagship part of the Advantage Assam 2.0 industrialisation roadmap. The policy envisioned large-scale investment in solar, wind, and most notably, green hydrogen production with targets of 2,000 kTPA and 10,000 new jobs annually.

However, by July 2025, an internal memo (revealed by Reuters, October 2025) confirmed that the Assam Cabinet had scrapped the policy without any public explanation. This abrupt withdrawal raises questions about political motives, bureaucratic pressures, and the balance between industrial ambitions and ground-level socio-political constraints.

The decision has created uncertainty for investors, weakened Assam’s competitive positioning in India’s clean energy map, and risks derailing its Advantage Assam investment narrative.

1. The Promise of Green Hydrogen in Assam

Economic Vision:

The green hydrogen policy was projected as a transformational lever for Assam’s economy, combining energy security, industrialisation, and job creation.

Jobs: 10,000 per annum in high-skilled and semi-skilled categories.

Investment: ₹6,000–7,000 crore (Numaligarh, Golaghat, MoUs with global firms like Matheson Hydrogen).

Industrialisation: Linking green hydrogen to fertilizer plants, oil refineries, and industrial parks.

Strategic Positioning:

Assam aimed to brand itself as the “green industrial hub of the Northeast”, positioning clean energy as both an economic and political flagship.

Advantage Assam 2.0:

The policy was integrated into Advantage Assam – the state’s industrial outreach platform to attract domestic and foreign investment. Green hydrogen was showcased as the emblem of futuristic industrialisation.

2. Political Economics of the Withdrawal

The scrapping of the clean energy policy cannot be understood merely as a technical or market decision. It reflects the political economy dynamics of Assam:

1. Electoral Calculus vs. Long-Term Policy

Assam heads into the 2026 Assembly elections, and short-term populist politics often dominate over long-horizon industrial policy.

Eviction drives, land allocation disputes, and ethnic-demographic tensions made green energy projects politically vulnerable, especially where industrial corridors clashed with local communities.

2. Centre-State Frictions

Delhi’s energy policy stresses green hydrogen as a national mission. Assam’s abrupt policy reversal may signal misalignment between state ambitions and central priorities.

It also weakens Assam’s bargaining power in federal resource allocation.

3. Investor Politics

Investors like NTPC Green, L&T, Sembcorp, and Ocior had shown interest. Their disappointment signals erosion of investor trust in Assam’s policy stability.

Political cost: the perception that Assam is an unreliable partner in India’s industrial growth map.

4. Opaque Governance

The lack of a public explanation raises suspicion.

Political critics argue the policy might have been scrapped due to internal lobbying by traditional energy lobbies (coal, oil) or due to disputes over land allocations linked to industrialists.

3. Social Economics of the Withdrawal

1. Job Creation Lost

10,000 jobs per year were projected, ranging from engineers and technicians to semi-skilled plant workers.

Scrapping the policy denies local youth an entry into high-value industries at a time when Assam faces an outmigration crisis (youth going outside the state for low-wage labour).

2. Land and Community Conflicts

Evictions in Parbatjhura, Nunai, Serfang, and Bhairabkund (where BJP/UPPL lost politically) were linked to land acquisition for industrial energy projects.

Civil society groups (e.g., United Land Rights Sangram Samity) framed the projects as industrial land grabs, leading to political pushback.

3. Social Contract and Trust Deficit

Communities see the scrapping as evidence that the government never had a transparent plan for balancing industrialisation with social justice.

Raises trust deficit both at the grassroots (citizens vs. state) and at the corporate level (investors vs. state).

4. Political Risk & Economic Consequences

Investor Confidence Erosion:

Assam’s policy volatility undermines its ability to attract capital compared to Gujarat, Rajasthan, or Tamil Nadu, where renewable energy policies are relatively stable.

Industrialisation Setback:

Green hydrogen was to anchor industrial diversification beyond oil & tea. Scrapping the policy risks Assam remaining locked in old extractive industries.

Geopolitical Dimension:

Northeast India, bordering Southeast Asia, was to be a showcase for India’s Act East Policy. The rollback weakens Assam’s credibility as a gateway economy.

Electoral Fallout:

The BJP, already facing rural discontent, corruption allegations, and backlash from eviction drives, may now also lose credibility on the “industrialisation and jobs” front.

5. Doubts & Suspicions

As reported by Reuters, the absence of any stated reason for scrapping the policy is itself politically charged. Analysts speculate:

Pressure from oil/refinery lobbies wary of disruptive green energy?

Land conflicts becoming politically untenable before elections?

Central BJP strategy to clip HBS’s wings and prevent him from building an independent industrial-political legacy?

Financial restructuring under hidden fiscal stress in the state?

The opacity only deepens suspicion that the decision was not purely technical but political.

6. The Road Ahead

Assam may need to draft a new “scaled-down” clean energy policy post-elections, balancing investor incentives with political realities.

Social legitimacy must be built via community-inclusive industrialisation, ensuring that land acquisition and resettlement are transparent.

Advantage Assam’s credibility now hinges on whether ongoing projects (Numaligarh hydrogen plant, Golaghat project) actually materialise.

Restoring investor confidence requires public assurances, regulatory clarity, and fiscal guarantees.

The scrapping of Assam’s green hydrogen flagship, without explanation, is more than an industrial policy reversal. It is a political economic event, exposing the tension between electoral populism, bureaucratic opacity, and long-term industrialisation goals.

It erodes investor trust, denies Assamese youth new opportunities, and risks derailing Assam’s Advantage Assam narrative. Unless a new, transparent framework emerges soon, Assam may lose its once-in-a-generation chance to leapfrog into the clean energy economy, remaining trapped in old extractive patterns with deepening social unrest.