Indian Oil Corporation (IOC) will be the nodal agency for the fund. The ministry has decided that the research and development division of IOC will set up a dedicated team to work on hydrogen fuel.
The team will also include representatives from other public sector oil units.
IOC has been directed to prepare a roadmap for two years to initiate work in identified areas such as production of hydrogen, its storage and distribution.
The oil company will also organise large-scale field trials in the next five years in collaboration with vehicle manufacturers.
The petroleum ministry has decided to establish an India Hydrogen Congress, with the involvement of all interested parties, which will serve a forum for interaction and exchange of ideas at the international conference to be held later this year.
The Planning Commission has also set up a committee under its member N K Singh to set out a roadmap for the introduction of hydrogen as an alternative fuel in the country.
The committee will assess India's comparative advantages in developing hydrogen, suggest research initiatives and work out a schedule for the introduction of the new technology.
Hydrogen does not occur in free state in large quantities. It is extracted from water through electrolysis. The economics of hydrogen fuel cell technology is a major hurdle to its commercialisation.