India’s coal sector is poised for significant activity in 2025, with plans to launch the country’s first coal trading exchange and boost coal output to meet rising demand. The government aims to facilitate trading and rate determination of coal while also focusing on coal gasification, a cleaner alternative that utilizes the chemical properties of coal.
Coal Additional Secretary Rupinder Brar emphasized the importance of coal demand for India’s growing economy and highlighted ongoing efforts to increase coal production. The government has revised its mine allocation policy to ensure mines are allocated only when ready for production, offering incentives for early operationalization and penalties for delays.
The coal ministry is committed to balancing environmental sustainability with the needs of coal-dependent communities. It is optimistic about the coal exchange set for 2025, with detailed planning underway. The production growth seen in state-owned Coal India Ltd (CIL) and its subsidiaries, as well as commercial and captive mines, is expected to continue.
Provisional figures show that cumulative coal production in the April-November period of the current fiscal year grew by 6.21% to 628.03 million tonnes (MT). Deloitte India projects thermal coal production to grow by 8-10%, driven by increased electricity consumption.
India’s demand for coking coal is expected to rise as the country expands its blast furnace capacity, with metallurgical coal imports increasing due to strong crude steel production growth. In FY25, Indian steel production is anticipated to grow by 6%, reaching 152-155 million tonnes.
To support coal and lignite gasification projects, the government launched a coal gasification incentive scheme with a budget of Rs 8,500 crore. Synthesis gas from coal gasification can produce synthetic natural gas, methanol, ethanol, ammonia, and petrochemicals.
The coal ministry’s action plan for 2024-25 includes establishing a coal trading exchange and enhancing market accessibility through an online trading platform with clearing and settlement mechanisms.
