MC EXCLUSIVE Budget 2026 may ease curbs on import of gasification equipment from border countries like China

In 2024, the government had announced an outlay of Rs 8,500 crore for promoting coal/lignite gasification.

• Budget may ease rules for importing coal gasification equipment from border nations
• Move could allow imports from China, a leader in gasification technology
• ₹5,925 crore allocated for coal and lignite exploration from 2026-27 to 2030-31

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The Budget for the financial year 2026-27 is likely to relax norms for sourcing equipment for gasification technology from “land border sharing countries”, official sources told Moneycontrol.

The move will allow the import of gasification equipment from China, a major player in sector.

“There may be support given to the gasification people to allow sourcing of equipment from land border sharing countries so that we can develop the technology,” one of the sources cited above said.

In the past four-five, the government has put in place several policy measures to accelerate coal or lignite gasification under the National Coal Gasification Mission, which targets 100 million tonnes (MT) of coal gasification by 2030.

The initiatives include a Rs 8,500-crore outlay to provide Viability Gap Funding for commercial and R&D projects and a 50 percent rebate in revenue share for coal gasification.

In 2021, the power ministry mandated the use of indigenised equipment to boost local manufacturing under the "Make in India" initiative.

Coal gasification is a process in which coal is converted into synthetic natural gas (syngas), which can be used in power generation, heating, and chemical production.

According to the International Energy Agency, China is significantly expanding its capacity for both coal and biomass to produce fuels, chemicals, and power, driven by energy security and pollution reduction goals.

“Imports were allowed, subject to certain permissions from the Department for Promotion of Industry and Internal Trade (DPIIT). The restrictions are now being eased to some extent. There may not be a permanent relaxation but could be provided as a window, which would enable access to the required technology for gasification,” the source said.

The government could also increase the funding for exploration of coal in the budget to meet the country’s growing energy needs and to give a boost to its self-reliance push.

In its year-end review of 2025, the coal ministry  said the government earmarked Rs 5,925 crore for the exploration of coal and lignite over the next five years, from the FY 27 to FY31.

This investment will be channelled through the Centrally Sector Scheme (CSS) of coal and lignite exploration.

“This targeted financial infusion is projected to facilitate the exploration of an additional area of about 1,845 square kilometres, involving a massive drilling program that will achieve a meterage of approximately 55.50 lakh meters,” the coal ministry said.