Demand of coal is higher than the current level of supply of coal in country. Coal is imported to bridge the gap between domestic demand and domestic supply. As per coal import policy, the import of coal has been kept under Open General License (OGL) and users are free to import coal from the sources of their choice as per their contractual prices on payment of applicable duty.

In India, the supply of high quality coal (low-ash coal) or coking coal is limited. Therefore, to bridge this demand-supply gap, there is no option but to resort to import of low-ash coal.

Superior quality non-coking coal is imported mainly by imported coal based power plants and other industrial users - paper, sponge iron, cements and captive power plants, on
consideration of transport logistics, commercial prudence, export entitlements and inadequate availability of such superior coal from indigenous sources.

In addition, to maximize the use of indigenous coal, the following steps are being taken for promotion of import substitution:

  • Source rationalization with part supply from higher grade coal sources.

  • More coal from various sources including higher grade were offered through various types of e-auction schemes particularly special forward e-auction for power consumers, not having Fuel supply Agreement (FSA) with CIL sources.

  • The provisions of SHAKTI policy of the Government of India for meeting the demand of various categories of power utilities are being implemented.

  • Supply of additional coal to power plants to meet the shortfall within the Annual Contracted Quantity (ACQ).

  • Implementation of Linkage auction for non-regulated sectors

  • Spot E-auction - For any Indian buyer (consumers & traders) suitable for short-term planning.

  • Exclusive E-auction - exclusively for the non-power consumers (including Captive Power Plant (CPPs) suitable for medium term planning.

  • Streamlining environment clearances & forestry clearances process to expedite operationalization of coal blocks.