India’s cabinet on Friday permitted the export of coal as the country’s power plants have a surplus, information minister Ashwini Vaishnaw said.
Power plants that have access to coal supply will be permitted to export up to 50% of their allocation and use coal flexibly across group companies.
India, the world’s second-largest coal producer, has been opening its coal sector to private players and commercial mining to meet rising energy demand and reduce import dependence.
The move to allow export of domestic coal comes as the country’s coal-fired power generation, which typically accounts for about 75% of India’s electricity output, has fallen on an annual basis in seven out of 11 months this year, the most since 2020.
The move will also benefit the country’s top coal miner, Coal India, which accounts for about three quarters of the country’s production. India is the world’s No.2 coal producer and consumer after China.
Indian power plants have comfortable stock levels because domestic coal production is strong and electricity demand growth has slowed, iEnergy Natural Resources said this week in a report.
The cabinet on Friday also approved the auction of coal for any industrial use.
The policy will allow domestic buyers to secure long-term coal supplies through auctions without end-use restrictions, except for coking coal, which will not be offered under the scheme.
Traders will be barred from participating, the government said.
The move aims to accelerate coal reserve utilisation, ease business processes and cut reliance on imports, the government said in a statement.