India Bets ₹8,500 Crore on Coal Gasification to Cut Oil, Fertiliser Imports

"We are importing petrochemicals, crude oil and fertiliser. All these things we can substitute through coal gasification projects," Reddy told reporters on the sidelines of a land leasing agreement for the Coal Gasification project of Bharat Coal Gasification and Chemicals Limited (BCGCL).

Coal gasification is a key transformative technology that converts coal into syngas, which can be further used to produce cleaner fuels, chemicals, fertilisers, and hydrogen. This approach enables more efficient and sustainable use of domestic resources while enhancing economic resilience.

The minister said the government has approved an incentive scheme of ₹8,500 crore to promote coal gasification and is in discussions with various ministries, including the finance ministry, on additional support measures.

"We have approved an incentive scheme of Rs 8,500 crores," he said, adding that further incentives are under discussion.

To accelerate adoption, the government has set up a coal gasification committee and initiated collaborations between public sector undertakings (PSUs) and private players. Reddy said the Centre will invite more domestic and foreign investors and organise meetings and workshops to expand participation.

"In coal gasification, the underground and the surface, lakhs of crores of rupees can be invested," he said, encouraging both Indian corporates and foreign companies to enter the sector.

Reddy said seven coal gasification projects have been approved so far, of which three are already under implementation.

He also highlighted growing involvement of research groups and investor interest, adding that the sector could be a "big game changer" for India in the coming years.

On technology, the minister said Indian companies are engaging with global counterparts to source advanced solutions, and the government will support companies investing in India.

"We will give incentives for the technology companies to invest in India. We will not give incentives for bringing technology," he said.

Addressing coal availability, Reddy said there is no shortage of coal in the country, and that production has reached record levels, with high stock levels at present.

"There is no shortage of coal. We have no problem in coal production," he said, adding that storage constraints have at times required production to be moderated.

Earlier in the day, the government facilitated a land leasing agreement for a coal gasification project in the Mahanadi Coalfields area in Odisha. The project, a joint venture between Coal India Limited and Bharat Heavy Electricals Limited, involves an investment of about ₹20,000 crore.

"Today, we have decided to hand over the MCL coal land area to set up these coal gasification projects," Reddy said, adding that the project is expected to be completed within four years.

The coal gasification projects are being pursued as part of a broader effort to meet India's energy and industrial needs while reducing import dependence.

- ANI