Cabinet Clears CoalSETU to Boost Industrial Coal Exports
New Delhi: The Union Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, today approved a new policy framework for the auction of coal linkages, establishing a dedicated window named CoalSETU (Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation). The initiative is aimed at enabling efficient, flexible, and transparent use of coal for diverse industrial applications and export, and is part of the government’s ongoing series of coal sector reforms.
Under the CoalSETU window, coal linkages will be allocated on a long-term auction basis for any industrial use or export. Domestic buyers requiring coal can participate in the auctions, while coking coal and traders are excluded. Coal obtained can be used for self-consumption, coal washing, or export of up to 50% of the allocated quantity, but resale within the domestic market is prohibited. Linkage holders may also utilise their allocations flexibly across their group companies, providing operational and logistical efficiency. Officials noted that the policy is intended to ease doing business, accelerate utilisation of existing coal reserves, and reduce India’s dependence on imported coal.
The new window supplements the existing Non-Regulated Sector (NRS) Linkage Auction Policy, which continues to provide coal on auction for cement, steel (coking), sponge iron, aluminium, and captive power plants for listed sectors—while excluding fertilisers such as urea. While the CoalSETU window removes end-use restrictions, the current auction process for specified end-user sub-sectors remains in place, allowing them to participate in both frameworks.
Allocation to washery operators under CoalSETU is expected to increase the domestic availability of washed coal, helping industrial users while simultaneously reducing the need for coal imports. Washed coal produced may also be exported under the policy, reflecting the government’s goal of maximising domestic resources and export potential.
CoalSETU aligns with the government’s broader commercial mining reforms, which permit allocation of coal blocks without end-use restrictions. Officials emphasise that this initiative ensures fair access, optimal resource utilisation, and better market responsiveness, while strengthening India’s industrial competitiveness.
The announcement has drawn attention from environmental experts and energy policy observers worldwide. Critics warn that expanding coal availability for industrial use and exports could undermine global climate goals, given coal’s high carbon intensity. Supporters argue that the policy secures energy supply, supports industrial growth, and reduces import dependence. Observers also note that COP30 concluded without a binding decision on fossil fuel use, allowing countries such as India the flexibility to expand coal use for domestic industry and export. Environmental advocates caution that without a parallel acceleration of renewable energy deployment, increased coal utilisation could exacerbate greenhouse gas emissions and delay the country’s clean energy transition.
Government officials maintain that CoalSETU is a strategic measure to improve industrial efficiency, market functioning, and coal exports, while broader reforms and renewable energy initiatives continue alongside efforts to balance energy security with environmental sustainability.
– global bihari bureau
