Our Bureau
New Delhi
The Union Cabinet is expected to soon approve a massive Rs 37,500 crore incentive scheme to promote coal gasification projects across India, in a major move to reduce the country’s dependence on imports of liquefied natural gas (LNG) and urea.
The coal ministry has already prepared a Cabinet note outlining the scheme, which aims to accelerate surface coal and lignite gasification projects nationwide. The initiative supports India’s self-reliance goal by cutting import dependence on critical commodities including LNG, urea, ammonium nitrate, ammonia, coking coal via DRI, methanol, and dimethyl ether (DME).
Under the proposed scheme, a single project can receive a maximum financial assistance of Rs 3,000 crore, significantly higher than earlier incentive limits. The program has no categories and offers unified support to both public sector undertakings and private companies.
The scheme is designed to help India achieve its national target of 100 million tonnes of coal gasification capacity by 2030. Coal gasification converts coal into synthetic gas (syngas), a cleaner fuel that can be used to produce electricity, chemicals, and fertilizers without relying heavily on imported natural gas.
Sources said the initiative will boost clean energy production while enabling higher utilization of India’s domestic coal and lignite resources for fuels and chemicals production. This marks a significant shift in India’s energy strategy, positioning coal conversion as a key pillar of the nation’s long-term energy transition.
The move comes as India races to cut its growing LNG and urea import bills, which have strained the country’s foreign exchange reserves. With over 200 coal gasifiers already operational globally producing syngas, ammonia, urea, and methanol, India aims to catch up with international clean coal technology standards.
This scheme is seen as a game-changer for India’s energy security and industrial self-sufficiency.
