The second round of the coal gasification scheme has concluded with two applications received from NTPC Ltd for Urea, and Methanol and Dimethyl Ether (DME). A release by the Coal Ministry indicated that “the applications envisage production of Urea, Methanol and Dimethyl Ether (DME), highlighting the potential of coal gasification in supporting domestic production of critical industrial products and diversifying the utilisation of India’s indigenous resources.”
The Coal Ministry has launched the 3rd round of the scheme with effect from November 10, 2026, providing another opportunity for eligible entities to submit proposals for setting up coal/lignite gasification projects in the country, with the last date for submission of applications on January 11, 2027. The successive rounds aim to encourage wider industry participation, attract investments, and accelerate adoption of coal gasification technologies towards the national target of achieving 100 million tonnes of coal gasification capacity by 2030.
On October 23, Coal and Mines Minister G Kishan Reddy said that efforts are underway to improve efficiency, technology, and private partnership in the sector, with coal continuing to meet 55% of India’s primary energy needs and 74% of electricity generation.
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Describing coal as an important industrial raw material, the Minister said that plans for its conversion into syngas, ammonia, urea, and methanol via coal gasification are being expedited, as MoUs have been completed after the auction to cut India’s import dependence. He pointed out that a financial push of ₹46,000 crore had been given for the first phase of coal gasification on an experimental basis to spur commercial-scale projects in the near future.
In June 2026, the Coal Ministry had called for indigenisation of coal gasification technology to adapt to Indian conditions to make urea and ammonia from gasified coal at scale to reduce the overall cost and import dependence. Speaking at an event in New Delhi, Coal Ministry’s Additional Secretary Rupinder Brar had said, “If you keep bringing technology from overseas, then you always wait for technicians to come over as a cascading effect.”
India currently imports over 85% of its crude oil requirement. Experts suggest that if coal gasification picks up, crude oil imports could come down to 65-70% of India’s total requirement, which would save foreign exchange spent to buy 15-20% of the current import volumes. The government is yet to provide an estimate on the extent of import substitution of LNG/LPG via coal gasification.
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India has already approved a ₹37,500 crore coal gasification scheme, with the Cabinet announcement indicating an expectation to generate ₹6,300 crore in revenue per year only from mining. The government had highlighted plans to complete all 25 plants in a period of 5 years, with 4 under-construction projects expected to be completed in a year. India is aiming at 100 million tonnes of coal gasification by 2030, with a Rs 8,500 crore incentive scheme already in place before the Cabinet announcement.
On October 27, 2025, CNBC-TV18 reported, citing government sources, that big corporates had expressed their interest in expanding operations in the sector. Government sources had told CNBC-TV18 that a new action plan/policy is being prepared, and three large conglomerates were learnt to have expressed their interest in investing more to increase their footprint in coal gasification.
Sources had indicated that private partnerships with Coal India for underground coal gasification were being explored, even as India explores technology partnerships in underground coal gasification with several countries. Highlighting that many companies are ready for pilot projects in coal gasification, sources had pointed out that the Prime Minister’s Office (PMO) was monitoring the increase in coal gasification by PSUs and the private sector.
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While surface coal gasification is already being tested in several parts of India, sources had added that underground coal gasification will be less polluting, as witnessed in ongoing projects in China, France, Germany and Canada.
NTPC files two applications under round 2 of coal gasification scheme, round 3 launched by govt