India Opens Coal Doors: New Policy for Industry

The Union Cabinet has announced CoalSETU, a new policy designed to establish a special auction window for industries to procure coal. This initiative, standing for Coal Linkage for seamless, efficient and transparent utilisation, is a significant step in the government's ongoing coal sector reforms. It aims to facilitate smoother, more efficient, and transparent coal supply chains throughout the country.

The CoalSETU policy permits coal linkage holders to export up to 50% of the coal they acquire through this channel, signaling India's robust domestic coal production capabilities. The coal procured can be utilized for direct consumption, coal washing, or for export. This provision is also expected to increase the availability of washed coal domestically, thereby decreasing import needs and opening avenues for exporting washed coal.

This new auction window will allow any domestic buyer requiring coal to participate, extending beyond the current restrictions to the non-regulated sector. While coking coal and traders are excluded, the policy ensures continued auctions for specified industries, offering an additional avenue for non-regulated companies to secure coal without end-use limitations, promoting efficient reserve utilization and reducing import dependence.