Union Cabinet clears new CoalSETU window to boost industrial use and coal exports

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The Union Cabinet, led by Prime Minister Narendra Modi, on Friday approved a new CoalSETU window under the Non‑Regulated Sector (NRS) Linkage Auction Policy, aimed at enhancing the utilisation of coal for industrial purposes and expanding export opportunities.

The CoalSETU window is a new long-term linkage auction mechanism designed to allocate coal to industries and exporters in a seamless, efficient and transparent manner. Under the new policy, coal linkages will be allotted on a long‑term auction basis not only for domestic industrial use but also for exports.

Eligible linkage holders can export up to 50 percent of their allocated coal, offering a significant push to Indian coal’s presence in global markets, the government said in a statement.

Addressing a media briefing after the Cabinet meet, Union Minister Ashwini Vaishnaw said demand from neighbouring countries is strong. “Nepal, Bangladesh and Bhutan have immediate requirements for coal, and apart from this, other countries also have demand where India can export,” he said, while adding that processed or washed coal will play a central role in the government's export strategy.

Vaishnaw also pointed to improving domestic self-reliance, noting that “coal imports as a percentage of total consumption in India have reduced from 26 percent in FY15 to 19.2 percent in FY25,” creating space for India to explore export markets without compromising domestic supply.

The shift comes at a time when India is producing record volumes of domestic coal, easing supply pressures for the power sector and core industries and creating room for export-oriented allocation.

The CoalSETU window also lifts earlier end-use restrictions, allowing broader participation from industries such as cement, steel (including coking coal users), sponge iron, aluminium and other NRS-linked sectors, except fertiliser-urea. This is expected to improve supply flexibility, support industrial productivity and create opportunities for companies looking to tap overseas buyers.

A key feature of the reform is the explicit inclusion of washery operators in the long-term linkage auctions. This is expected to boost the supply of washed coal, which has strong demand from both domestic and export markets due to its higher quality and lower ash content.