Efforts to Reduce Coal
Import Dependency
·
Coal
under Open General License (OGL):
Free to import by consumers; subject to duties.
·
ACQ
Increased to 100%: Full
normative requirements met for power plants to boost domestic supply.
·
Longer
Tenure for Coking Coal Linkages:
NRS linkage auction revised for up to 30
years.
·
Full
PPA Requirement Supply: Coal
companies to meet complete demand of power sector linkage holders.
·
Coal
Import Monitoring System (CIMS):
Registration mandatory from Dec 2020; real-time tracking of imports.
·
Strategy
Paper Released:
Focused on substituting imported coal with domestic supply.
·
New
NRS Sub-sector Created (2024):
For steel via WDO route to boost coking coal consumption.
·
Coking
Coal Mission Launched:
Enhance supply to steel sector, reduce coking coal imports.
·
Imported
Coal-Based Plants Covered under SHAKTI (2025): Access to domestic coal for ICB plants.
·
FSA
Holders Eligible for Extra Coal:
Beyond ACQ, under Revised SHAKTI Policy 2025.
·
Regular
Review of Coal Blocks
·
MMDR
Act Amendment (2021):
Captive mines can sell 50% in open market.
·
Single
Window Clearance:
Faster approvals.
·
Project
Management Unit (PMU):
Handholding for early mine operations.
·
Launched
in 2020:
Revenue sharing model, 100% FDI allowed.
·
Incentives:
o Early production: 50% rebate.
o Gasification/Liquefaction: 50% rebate.
·
Modern
Tech Adoption:
o Underground: Continuous Miners, Longwall,
Highwall.
o Opencast: High-capacity
Excavators/Dumpers, Surface Miners.
·
Digital
Transformation in 7
mega mines.
·
Project
Clearances Accelerated
·
Coal
Handling Infrastructure:
CHPs, crushers, weigh bins being developed.
·
Coal
Imports (FY 2024–25):
243.62 MT
(↓ 20.91 MT from FY
2023–24: 264.53 MT)
·
Forex
Savings (FY 2024–25):
₹60,681.67 crore
·
Domestic
Coal Production Target: 1.5 billion tonnes by FY
2029–30
·
Coal
Logistics Policy (Feb 2024):
Infrastructure development for efficient coal evacuation
The coal is kept under the Open General
License (OGL) and consumers are free to import coal from the source of their choice
as per their contractual prices on payment of applicable duties. The steps taken
by the Government to reduce coal import dependency are as under:
i.
The Annual Contracted Quantity (ACQ) has been increased upto 100% of the normative requirement, in cases where ACQ was
either reduced to 90% of normative requirement (non-coastal power plants) or where
ACQ was reduced to 70% of normative requirement (coastal power plants). Increase
in ACQ would result in more domestic coal supplies, thereby, reducing import dependency.
ii.
Vide the amendment to the Non-Regulated Sector (NRS) linkage auction policy
introduced in 2020, the tenure of coking coal linkages in the NRS linkage auction
has been revised for a period upto 30 years. Increase
in tenure of coking coal linkages in the NRS linkage auction for a period upto 30 years is expected to have a positive impact towards
coal imports substitution.
iii.
Government has decided in 2022 that the coal to meet the full Power Purchase
Agreement (PPA) requirement of all the existing linkage holders of Power Sector
shall be made available by the coal companies irrespective of the trigger level
and ACQ levels. This decision of the Government of meeting the full PPA requirement
of the linkage holders of the Power Sector shall reduce the dependence on the imports.
iv.
An Inter - Ministerial Committee (IMC) was constituted in the Ministry of
Coal on 29.05.2020 for the purpose of coal import substitution. On directions of
IMC, an Import Data System has been developed by Ministry of Coal to enable the
Ministry to track import of coal. As per Foreign Trade Policy governing import of
goods, coal is freely importable without any restrictions. However, with effect
from December, 2020, the same has been revised from “Free” to “Free subject to compulsory
registration in Coal Import Monitoring System (CIMS) Portal”. Efforts are being
made on a continuous basis to ensure more domestic supplies of coal. Thus, the entire
substitutable imported coal is expected to be met by the country and no import other
than the very essential should happen. A Strategy Paper on Coal Import Substitution
has been released.
v.
A new sub-sector ‘Steel using Coking coal through WDO route’ has been created
in March, 2024 under the NRS linkage auctions which shall lead to increase in the
domestic coking coal consumption and shall increase the availability of washed coking
coal in the country, thereby, reducing coking coal imports.
vi.
Coking Coal Mission has been launched to enhance coking coal supply to the
Steel Sector to reduce imports of coking coal. Initiatives have been taken to enhance
coking coal production.
vii.
Imported Coal Based (ICB) Plants have been allowed to secure coal under the
Revised SHAKTI Policy, 2025. The coal availability for ICB Plants under the Revised
SHAKTI Policy is expected to reduce the dependence of these ICB plants on the imported
coal.
viii.
Existing Fuel Supply Agreement (FSA) holders have been allowed to secure
coal under the Revised SHAKTI Policy, 2025 after procuring 100% of the ACQ coal
under existing FSA. Coal availability beyond the ACQ to the existing FSA holders
will benefit the power producers to meet the full requirement of the power plants.
The steps taken by the Government to increase
the coal production in the country are as under:
i.
Regular reviews by Ministry of Coal to expedite the development of coal blocks.
ii.
Enactment of Mines and Minerals (Development and Regulation) Amendment Act,
2021 [MMDR Act] for enabling captive mines owners (other than atomic minerals) to
sell up to 50% of their annual mineral (including coal) production in the open market
after meeting the requirement of the end use plant linked with the mine in such
manner as may be prescribed by the Central Government on payment of such additional
amount.
iii.
Single Window Clearance portal for the coal sector to speed up the operationalization
of coal mines.
iv.
Project Management Unit (PMU) for hand-holding of coal block allottees for
obtaining various approvals / clearances for early operationalization of coal mines.
v.
Auction of commercial mining on revenue sharing basis launched in 2020. Under
commercial mining scheme, rebate of 50 % on final offer has been allowed for the
quantity of coal produced earlier than scheduled date of production. Further, incentives
on coal gasification or liquefaction (rebate of 50 % on final offer) have been granted.
vi.
Terms and conditions of commercial coal mining are very liberal with no restriction
on utilization of coal, allowing new companies to participate in the bidding process,
reduced upfront amount, adjustment of upfront amount against monthly payment, liberal
efficiency parameters to encourage flexibility to operationalize the coal mines,
transparent bidding process, 100% Foreign Direct Investment (FDI) through automatic
route and revenue sharing model based on the National Coal Index.
In addition to the above, coal companies
have also taken the following steps to increase domestic coal production:
i.
Coal India Limited (CIL) has adopted a number of measures to increase coal
production. In its Underground (UG) mines, CIL is adopting new and modern technologies
like Mass Production Technologies (MPT) with the deployment of Continuous Miners
(CMs), Longwall (LW) and Highwall (HW) wherever feasible. In its Opencast (OC) mines,
CIL already has State-of-the-Art technology in its high-capacity Excavators and
Dumpers. Standardization of Heavy Earth Moving Machinery (HEMM) has been done in
opencast mines. Surface Miners are also deployed in opencast mines for efficient
and eco-friendly mining. Digital transformation has been implemented on pilot scale
in 7 of its mega mines.
ii.
Regular liaison is being undertaken by Singareni
Collieries Company Limited (SCCL) for expediting the grant of permissions and clearances
for grounding of new projects and operation of existing projects. SCCL has initiated
action for developing infrastructure for evacuation of coal like Coal Handling Plants
(CHPs), Crushers, Mobile Crushers, Pre-weigh-bins etc.
During the FY 2024-25, total coal imported
in the country was 243.62 Million Tonnes (MT), whereas, in FY 2023-24, it was 264.53
MT. Due to reduction of around 20.91 MT in coal imports, there has been a Forex
saving of around ₹ 60,681.67 Crores during the FY 2024-2025 compared to FY
2023-24.
Most of the requirement of coal in the
country is met through indigenous production/ supply. Ministry of coal has set an
ambitious domestic coal production target of about 1.5 BT by FY 2029-30. The focus
of the Government is on increasing the domestic production of coal and to reduce
non-essential coal imports. Ministry of Coal has launched the Coal Logistic Plan and Policy in February,
2024 to develop infrastructure for efficient coal evacuation in the country considering
increased coal production projection by FY 2029-30.
This information was given by Union Minister
of Coal and Mines G. Kishan Reddy in a written reply in Rajya Sabha on 21 July,
2025.