Cabinet Approves New Rules To Broaden Export Market For Indian Coal

(MENAFN- Live Mint) New Delhi: In bid to find new buyers for domestic coal, the union cabinet has approved a new policy to allow coal buyers under linkages or long term contracts to export it.

The cabinet on Friday also approved the 16th Census of India, which will start in April 2026 and end in February 2027. About three million people will help conduct the world's largest statistical exercise, for which ₹11,718 crore has been approved.

Coal linkage is a contract or agreement for the supply coal from specific mines to designated consumers. The move is aimed at broadening the market for Indian coal and allowing the supply of more coal for exports. India's annual coal production crossed the one billion tonnes for the first time in FY24.

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The new coal allocation policy – Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU) – will allow for setting up a separate window named 'CoalSETU' for auctions of coal linkages of contracts. This will allow domestic buyers who need coal to acquire it at auction. Under the current rules, entities that procure coal meant for sectors other than power can use it only for themselves.

"Looking at the current and future market dynamics and for the purpose of ease of doing business and for accelerated utilization of existing coal reserves and reduce dependence on imported coal for meeting country's energy requirement, there was a need to have a fresh look at the current arrangements of coal supplies to the NRS, and extend the linkages in NRS to coal consumers without any end use restrictions," the cabinet said an official statement.

Under the new norms, coal linkage holders will be able to export up to 50% of the coal procured via linkages and enter into fuel supply agreements of up to 15 years.

Amrit Lal Meena, former secretary at the union coal ministry, said, "The move is to ensure that amid growing coal production and more coal coming in from private players, the domestic coal finds more offtakers. There is abundance of coal in the country and as the end-use restriction has been lifted, now the procurers may also sell the coal to other players and even export."

He added said that India would look at neighbouring countries – Nepal, Bangladesh and Sri Lanka – as the initial markets for Indian coal exports, owing to the lower logistics costs. Meena also said the move to allow more exports would help with the balance of trade as India still imports most of its coking coal.

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Following a cabinet decision in April, the government has approved caste enumeration as part of the census. It said in an official statement that new digital tools, including mobile applications for data collection and a real-time census management and monitoring system (CMMS) portal will ensure improved accuracy and faster processing.

The census is crucial for policymaking, and deciding the share of each state in Centre's pool of tax revenue. India's most recent census was conducted in 2011.

The Fifteenth Finance Commission's (FFC) award period ends in April 2026. As per the FFC formula, 41% of Centre's revenue is currently shared with states. The share of revenue for each state is decided on the basis of factors such as population. The Sixteenth Finance Commission's award period starts in April.

The cabinet also approved the minimum support price (MSP) for copra for the 2026 season. The MSP for fair average quality of milling copra has been fixed at ₹12,027 per quintal and for ball copra at ₹12,500 per quintal for the 2026 season. This marks an increase of ₹445 per quintal for milling copra and ₹400 per quintal for ball copra over the previous season.

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