A scheme to promote surface coal and lignite gasification projects, with the aim of strengthening India’s energy security and reducing import dependence, has been approved by the Union Cabinet, chaired by Narendra Modi, with a budget of ₹37,500 crore.
An official announcement stated that the initiative will mainly benefit coal-bearing regions, with an estimated 50,000 direct and indirect jobs to be created across 25 projects.
Along with the reform push, the government has given investors long-term policy certainty by extending the coal linkage tenure to 30 years under the “Production of Syngas leading to Coal Gasification” framework in the Non-Regulated Sector (NRS).
In addition to additional GST and downstream economic benefits, the government anticipates ₹6,300 crore in yearly revenue from coal gasification.
Coal accounts for more than 55% of India’s energy mix, and the nation has enormous reserves of both coal (401 billion tonnes) and lignite (47 billion tonnes). This action is taken in response to growing energy uncertainty on a global scale and is intended to lower India’s import bill for essential energy products, which was approximately 2.77 lakh crore in FY25.
Several projects are already under way as part of a ₹8,500 crore support package approved in 2024 and the National Coal Gasification Mission (2021), both of which the scheme expands upon.
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