Cabinet approves CoalSETU window to auction coal linkages for industrial use and exports
Coal linkages secured under the new window may be used for own consumption, coal washing, export or other permissible purposes, but not for resale in the domestic market.
New Delhi, December 13: The Cabinet Committee on Economic Affairs on Friday approved the creation of a new “CoalSETU window” under the non-regulated sector linkage policy, enabling auction-based allocation of coal linkages for any industrial use and export, in a move aimed at improving access, efficiency and utilisation of domestic coal resources.
The policy, titled Auction of Coal Linkage for Seamless, Efficient and Transparent Utilisation (CoalSETU), introduces a dedicated window within the NRS linkage auction policy of 2016. Under this framework, domestic coal linkages will be auctioned on a long-term basis without end-use restrictions, except for resale within the country. Coking coal will not be offered under the new window.
The decision is part of a broader set of coal sector reforms intended to accelerate utilisation of existing coal reserves, reduce dependence on imported coal and improve ease of doing business for industrial consumers.
At present, the NRS linkage policy provides for auction-based allocation of coal to specified end-user sub-sectors such as cement, steel, sponge iron and aluminium, including their captive power plants. These allocations are restricted to defined end uses. The newly approved CoalSETU window removes such restrictions, allowing any domestic buyer requiring coal for industrial purposes or export to participate in the auction process. Traders will not be eligible to participate.
The existing auction mechanism for specified end-user sub-sectors under the NRS policy will continue in parallel. Companies operating in these sub-sectors will also be eligible to bid under the CoalSETU window.
Coal linkages secured under the new window may be used for own consumption, coal washing, export or other permissible purposes, but not for resale in the domestic market. Linkage holders will be allowed to export up to 50% of their allocated coal quantity. The policy also allows flexible utilisation of coal across group companies.
The cabinet noted that growing demand for washed coal presents an opportunity to strengthen domestic capacity. Allocation of coal linkages to washery operators is expected to increase the availability of washed coal in India, reduce imports and support exports of value-added coal products.
The CoalSETU window aligns with the government’s decision to open commercial coal mining without end-use restrictions and is expected to support industrial growth while ensuring transparent and optimal allocation of coal resources.
