Upgraded 13 May 2026 at 16:55 IST
The Union Cabinet on Wednesday authorized a Rs 37,500 crore plan to promote surface area coal and lignite gasification tasks, intending to gasify around 75 million tonnes of coal and bring in financial investments of as much as Rs 3 lakh crore, Union Minister Ashwini Vaishnaw stated throughout a Cabinet instruction.
The Union Cabinet provided its nod to aRs 37,500 crore coal gasification plan to slash import costs.|Image: X
The Union Cabinet on Wednesday authorized a Rs 37,500 crore plan to promote surface area coal and lignite gasification jobs, intending to gasify around 75 million tonnes of coal and bring in financial investments of as much as Rs 3 lakh crore, Union Minister Ashwini Vaishnaw stated throughout a Cabinet rundown.
The Cabinet led by Prime Minister Narendra Modi, authorized the “Scheme for Promotion of Surface Coal/Lignite Gasification Projects” with an overall monetary investment of Rs 37,500 crore.
Dealing with the media after the Cabinet conference, Vaishnaw stated the plan is meant to speed up India’s coal and lignite gasification program and support the nationwide target of gasifying 100 million tonnes of coal by 2030.
According to Vaishnaw, “The scheme is aimed at accelerating India’s coal/lignite gasification programme and advancing the national target of gasifying 100 million tonnes of coal by 2030.” He included that the relocation would assist enhance India’s energy security and minimize reliance on imports of items such as melted gas (LNG), urea, ammonia and methanol.
India has among the world’s biggest reserves of coal and lignite, with around 401 billion tonnes of coal reserves and around 47 billion tonnes of lignite reserves. Coal presently contributes more than 55 percent of India’s overall energy mix.
The federal government mentioned that coal gasification is a procedure through which coal and lignite are transformed into synthesis gas, frequently called syngas. This syngas can then be used for creating electrical energy and production chemicals, fertilisers and other downstream items.
Under the plan, monetary rewards of as much as 20 percent of the plant and equipment expense will be offered brand-new surface area coal and lignite gasification jobs. The choice of tasks will happen through a “transparent and competitive bidding process,” he specified.
According to the main release by the cabinet, the rewards will be paid out in 4 equivalent instalments connected to forecast turning points.
“Financial incentive for any single project capped at Rs.5,000 crore; for any single product (except Synthetic Natural Gas and Urea) capped at Rs.9,000 crore; and any single entity group capped at Rs.12,000 crore across all projects,” the release stated.
The federal government likewise revealed an accompanying reform under which coal linkage period has actually been extended as much as 30 years under the “Production of Syngas leading to Coal Gasification” sub-sector in the Non-Regulated Sector linkage auction structure. The release stated the relocation would offer “long-lasting policy certainty for financial investment in coal gasification tasks.”
Highlighting the financial effect of the plan, the release stated the program is anticipated to mobilise financial investments worth Rs 2.5 lakh crore to Rs 3 lakh crore and produce around 50,000 direct and indirect tasks throughout 25 jobs in coal-bearing areas.
The federal government stated the plan would help in reducing India’s reliance on imports of LNG, ammonia, urea, methanol and coking coal, while insulating the economy from “worldwide cost volatility and geopolitical supply-chain interruptions.”
According to the release, India’s import costs for items such as LNG, urea, ammonium nitrate, ammonia, coking coal and methanol stood at around Rs 2.77 lakh crore in FY2025. “A vulnerability further exposed by the ongoing geopolitical situation in West Asia,” it included.
The release stated the plan is technology-agnostic, while motivating the adoption of native innovations to enhance India’s domestic coal gasification environment and lower reliance on foreign EPC specialists.
The federal government included that coal and lignite utilisation under the plan is anticipated to produce around Rs 6,300 crore every year in earnings from the targeted 75 million tonnes of gasification, apart from extra GST and other levies from downstream markets.
The brand-new plan constructs on the National Coal Gasification Mission introduced in 2021 and the Rs 8,500 crore coal gasification plan authorized in January 2024, under which 8 jobs worth Rs 6,233 crore are currently under application, it kept in mind.