Hyderabad: Union Minister for Coal and Mines G Kishan Reddy announced that, in a significant step under the ongoing coal sector reforms, the Union Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the creation of a new policy window titled CoalSETU (Seamless, Efficient & Transparent Utilisation). This initiative, announced as part of the Azadi Ka Amrit Mahotsav celebrations, aims to ensure equitable access to coal resources, foster industrial growth, and reduce the country’s dependence on imports.

Sharing the decision on X on Friday, he said the CoalSETU window will be incorporated into the existing Non-Regulated Sector (NRS) Linkage Auction Policy of 2016, allowing coal linkages to be allocated on a long-term auction basis for any industrial use and export. Importantly, coking coal will not be offered under this window. The move expands the scope of coal allocation beyond specified end-users such as cement, sponge iron, aluminium, and captive power plants, enabling broader participation by domestic buyers.

Officials explained that the policy responds to evolving market dynamics and the need for ease of doing business. By extending coal linkages without end-use restrictions, the government aims to accelerate the utilisation of domestic coal reserves, reduce reliance on imported coal, and strengthen India’s energy security, aligning with earlier reforms that opened the coal sector for commercial mining.

Under the new framework, coal linkage holders will be permitted to use coal for their own consumption, exports, or other purposes such as coal washing, but resale within the country will not be allowed. Export of coal will be capped at 50 per cent of the linkage quantity, ensuring domestic requirements remain prioritised. Companies will also have the flexibility to distribute coal among their group entities based on operational needs. The policy is expected to particularly benefit washery operators, as increased availability of washed coal will reduce imports and simultaneously create opportunities for exports. Washed coal, which is in growing demand both domestically and internationally, will enhance efficiency in industrial applications and contribute to India’s export potential.

The existing auction system for specified end-user sub-sectors in the NRS will continue, with those users also eligible to participate in the CoalSETU window. However, traders will not be allowed to bid under this mechanism, ensuring that coal is utilised directly by industries and exporters.