India has launched CoalSETU, a new policy for long-term coal linkage auctions aimed at industrial use and exports. This dedicated window allows any domestic industrial buyer to bid, simplifying procedures and boosting the utilization of coal reserves. Fuel supply agreements can extend up to 15 years, with flexible use within group companies, potentially reducing imports and creating export opportunities.
NEW DELHI: In a fresh push to reform coal sector, Cabinet Committee on Economic Affairs Friday approved a CoalSETU policy, a dedicated window for long-term auction of coal linkages for industrial use and exports.The new CoalSETU window – Policy for Auction of Coal Linkage for Seamless, Efficient and Transparent Utilisation – will be added to the existing 2016 linkage auction policy for the non-regulated sector. Unlike current system, where coal linkages are auctioned only to specified end users such as cement, steel, sponge iron and aluminium plants, the new window will allow any domestic industrial buyer to bid for coal linkages. Coking coal will not be offered, and traders will be barred to prevent market distortion.Officials said the move aims at simplifying procedures, boosting ease of doing business and ensuring faster utilisation of India’s coal reserves at a time when the country is working to cut dependence on imports. It also aligns with the wider opening of the coal sector for commercial mining, where end-use restrictions had already been removed. Existing linkage auctions for specified sectors will continue, but these industries may join the new window. Fuel supply agreements can be signed for up to 15 years, and flexible use of coal linkages within group companies has been allowed.Commercial mining of coal, launched in 2020, has improved domestic availability. India crossed milestone of one billion tonnes of coal production in a year for the first time in 2024-25. Under the policy, coal obtained through this window can be used for own consumption, export (up to 50% of quantity), coal washing or by group companies. Resale within the country will not be allowed. The govt expects the policy to encourage more washed coal production, reduce imports and create export opportunities.
