New Delhi — In a major move aimed at boosting energy security and reducing import dependence, the Government of India has approved an ambitious ₹37,500 crore (approximately $4.5 billion) incentive scheme to accelerate coal and lignite gasification projects across the country.
The decision was approved by the Union Cabinet chaired by Prime Minister Narendra Modi and is being viewed as a strategic step toward achieving India’s target of 100 million tonnes of coal gasification capacity by 2030.
The initiative is expected to reduce India’s dependence on imported energy-related products such as liquefied natural gas (LNG), urea, ammonia, and methanol, while simultaneously promoting domestic manufacturing, industrial growth, and employment generation.
Large-Scale Coal Gasification Expansion Planned
Under the newly approved scheme, India plans to develop approximately 75 million tonnes of coal and lignite gasification capacity over the coming years.
To encourage participation from public and private sector companies, the government will provide financial incentives of up to 20 percent of the plant and machinery cost for eligible projects. Authorities stated that projects will be selected through a transparent and competitive bidding process to ensure efficiency and accountability.
The policy marks one of the country’s largest initiatives focused on advanced coal utilization technologies.
SECL Exploring Coal Gasification Opportunities
Among India’s major coal producers, South Eastern Coalfields Limited has also begun exploring opportunities in the coal gasification sector.
According to officials, studies and technical assessments are currently underway at the Mahamaya Mine located in SECL’s Bhatgaon Area to evaluate the feasibility of coal gasification projects.
The initiative is expected to support cleaner and more value-added utilization of coal resources in the future while opening new industrial possibilities in coal-producing regions.
Understanding Coal Gasification Technology
Coal gasification is an industrial process that converts coal into “Synthesis Gas,” commonly known as syngas. The gas primarily contains hydrogen, carbon monoxide, and other chemical compounds that can be used in various industries.
Syngas can serve as a raw material for the production of:
- Fertilizers
- Chemicals
- Synthetic fuels
- Methanol
- Hydrogen-based energy products
- Industrial feedstock
Experts believe the technology could help India lower its import bill, improve domestic manufacturing capacity, and strengthen supply chains for key industrial sectors.
Massive Investment and Employment Potential
Government estimates suggest the scheme could attract investments ranging between ₹2.5 lakh crore and ₹3 lakh crore (roughly $30–36 billion).
The initiative is also projected to generate nearly 50,000 direct and indirect jobs, particularly in mining and industrial regions. Increased economic activity around coal-bearing areas is expected to contribute to regional infrastructure development and local business growth.
Strategic Importance for India
India currently possesses approximately:
- 401 billion tonnes of coal reserves
- 47 billion tonnes of lignite reserves
Given the scale of these domestic resources, policymakers consider coal gasification a crucial pillar in advancing the country’s long-term energy strategy.
The initiative aligns closely with India’s “Atmanirbhar Bharat” (Self-Reliant India) vision and the government’s “Make in India” manufacturing campaign, both of which focus on reducing external dependence while strengthening domestic industrial capabilities.
Industry experts say the policy could position India among the leading nations investing in advanced coal conversion technologies, while balancing economic growth, industrial demand, and energy security objectives.
