In a landmark move toward strengthening India’s energy ecosystem, the Union Cabinet has approved the CoalSETU (Seamless, Efficient & Transparent Utilisation) window, a new policy designed to modernize coal allocation and boost industrial growth. Chaired by Prime Minister Narendra Modi, the Cabinet’s decision signals a shift toward transparent, flexible, and market-oriented coal distribution that supports both domestic energy security and global trade.
Modernizing Coal Allocation for Industrial Growth
CoalSETU introduces a dedicated auction window under the Non-Regulated Sector (NRS) Linkage Policy, allowing domestic industrial users to secure coal linkages on a long-term auction basis without end-use restrictions. While coking coal is excluded, all other industrial sectors—including cement, metals, aluminium, and power—can participate.
Previously, coal allocations were tightly restricted to specific industries, creating supply bottlenecks and limiting flexibility. CoalSETU removes these barriers, aligning coal distribution with India’s commercial mining reforms, which already permit coal production without end-use restrictions.
By excluding traders, the policy ensures coal reaches genuine industrial users, fostering operational efficiency and long-term planning.
Enhancing Energy Security and Reducing Imports
India’s industrial expansion has created rising energy demand, with a heavy dependence on imported coal due to domestic supply constraints. CoalSETU addresses this challenge by enabling wider and more efficient utilisation of domestic coal reserves, directly contributing to energy security.
Industries can now access predictable coal supplies, mitigating risks associated with global price volatility and geopolitical uncertainties. By promoting optimal use of existing coal reserves, the policy not only strengthens energy resilience but also aligns with India’s goal of sustainable industrial growth.
Unlocking Export Potential and ESG Benefits
One of CoalSETU’s most transformative features is its facilitation of coal exports. Linkage holders can now export up to 50% of their coal allocation, creating new revenue streams and positioning India as a strategic supplier of high-quality coal in regional markets.
The policy also benefits coal washery operators, who can access dedicated linkages to produce washed coal with lower ash content. Washed coal is environmentally preferable, reducing emissions and improving combustion efficiency—a critical ESG consideration for both domestic and international markets.
By increasing the availability of cleaner coal, CoalSETU supports India’s sustainability goals while strengthening its industrial competitiveness.
Implications for Business and Infrastructure
From a business perspective, CoalSETU enhances ease of doing business in energy-intensive sectors. Long-term linkages provide certainty for investment planning, expansion, and cost management. Companies can also flexibly share coal within their group operations, optimizing operational efficiency.
For the infrastructure and energy sectors, the policy ensures reliable coal supply for power generation, steel, cement, and other industries, facilitating uninterrupted operations and industrial scaling. The combination of transparent auctions, long-term planning, and export opportunities is likely to attract new investments and support India’s vision of sustainable industrialization.
A Step Toward Sustainable Energy Policy
CoalSETU embodies a broader reform philosophy—market-based allocation, transparency, and sustainable utilisation of energy resources. It aligns domestic coal policy with global ESG standards while fostering industrial growth and export potential.
By unlocking domestic coal reserves, enabling strategic exports, and promoting cleaner energy use, CoalSETU positions India as a responsible and competitive player in the global energy market. For businesses, policymakers, and ESG-conscious investors, the policy offers both strategic opportunity and a model for sustainable industrial resource management.