Lok Sabha Question No. 2684 (UNSTARRED), answered on 2024-08-07
Subject: Dependency of Coal Imports
Ministry: COAL
Asked by: Shri K Gopinath

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA

## UNSTARRED QUESTION No.2684 TO BE ANSWERED ON 07.08.2024

## Dependency of Coal Imports

## 2684.  SHRI K. GOPINATH:

Will the Minister of COAL be pleased to state:

- (a) whether the Government is planning to curb the imports of coal in the country and if so, the details thereof;
- (b) whether the Government has taken any steps to reduce the dependency of coal imports in the country; and
- (c) if so, the details thereof?

## ANSWER

## MINISTER OF COAL AND MINES (SHRI G. KISHAN REDDY)

(a)to(c): Yes. The thrust is on increasing domestic production. During 202324, in India domestic coal production increased to 997.26 Million Tonnes (MT) registering thereby a growth of 11.65% over last financial year (2022-23). In the  current  financial  year  till  July  2024,  coal  production  was  321.41  MT registering 9.6% growth compared to the same period of last financial year. However,  as  per  the  existing  import  policy,  coal  is  kept  under  the  Open General License (OGL) and consumers are free to import coal from the source of their choice as per their contractual agreement on payment of applicable duty. Government has initiated several measures to ramp up domestic coal production and to substitute coal imports.

(i) The Annual Contract Quantity (ACQ) has been increased upto 100% of the normative requirement, in the cases where the ACQ was either reduced to 90% of normative requirement (non-coastal) or where the ACQ was reduced to 70% of normative requirement (coastal power plants). Increase in the ACQ would result in more domestic coal supplies, thereby, reducing the import dependency.

(ii) Under the provisions of Para B (viii) (a) of SHAKTI Policy, coal linkage is provided  for  short  term  for  sale  of  power  generated  through  that  linkage through  any  product  in  Power  Exchanges  or  in  short  term  through  a transparent  bidding  process  through  DEEP  portal.  In  addition,  with  the amendment  to  the  Non-Regulated  Sector  (NRS)  linkage  auction  policy introduced in 2020, the tenure of coking coal linkages in the NRS linkage auction has been revised for a period upto 30 years. The coal offered for short term to the Power Plants under the amended provisions of SHAKTI Policy as well as increase in the tenure of the coking coal linkages in the NRS linkage auction  for  a  period  upto  30  years  is  expected  to  have  a  positive  impact towards coal imports substitution.

(iii) Government  has  decided  in  2022  that  the  coal  to  meet  the  full  PPA requirement of all the existing linkage holders of Power Sector shall be made available by the coal companies. The decision of the Government of meeting the  full  PPA  requirement  of  the  linkage  holders  of  the  Power  Sector  shall reduce the dependence on the imports.

(iv) Government has approved creation of a new sub-sector under the NRS linkage auctions with the nomenclature of 'Steel using Coking coal through Washery  Developer  and  Operator  (WDO)  route'.  Creation  of  the  new  subsector with the assurance for long-term coal linkage to the Steel Sector from the identified mines for the entire term of the contract period shall increase the availability of washed coking coal in the country and enhanced domestic coking  coal  consumption  by  the  Steel  Industry  in  the  country,  thereby reducing the coking coal imports.

(v) An  Inter  -  Ministerial  Committee  (IMC)  has  been  constituted  in  the Ministry of Coal on 29.05.2020 for the purpose of coal import substitution. The Representatives from Ministry of Power, Ministry of Railways, Ministry of Shipping, Ministry of Commerce, Ministry of Steel, Ministry of Mines, Ministry of Micro, Small & Medium Enterprises (MSME), Department for Promotion of Industry & Internal Trade (DPIIT), Central Electricity Authority (CEA), Coal Companies and Ports are members of this IMC. Eleven meetings of the IMC have been held so far. On the directions of the IMC, an Import Data System has been developed by Ministry of Coal to enable the Ministry to track the imports of coal. Efforts are taken to ensure more domestic supplies of coal.

(vi) The  following  steps have  been  taken  by  the  Government  to  boost  the production of coal:

- i. Regular reviews by Ministry of Coal to expedite the development of coal blocks.
- ii. Enactment  of  Mines  and  Minerals  (Development  and  Regulation) Amendment Act, 2021 [MMDR Act] for enabling captive mines owners (other than atomic minerals) to sell up to 50% of their annual mineral (including  coal)  production  in  the  open  market  after  meeting  the requirement of the end use plant linked with the mine in such manner as may be prescribed by the Central Government on payment of such additional amount.
- iii. Single  Window  Clearance  portal  for  the  coal  sector  to  speed  up  the operationalization of coal mines.
- iv. Project  Monitoring  Unit  for  hand-holding  of  coal  block  allottees  for obtaining various approvals / clearances for early operationalization of coal mines.
- v. Auction of commercial mining on revenue sharing basis launched in 2020. Under commercial mining scheme, rebate of 50 % on final offer has  been  allowed  for  the  quantity  of  coal  produced  earlier  than scheduled date of production. Also, incentives on coal gasification or liquefaction (rebate of 50 % on final offer) have been granted.
- vi. Terms and conditions of commercial coal mining are very liberal with no  restriction  on  utilization  of  coal,  allowing  new  companies  to participate in the bidding process, reduced upfront amount, adjustment  of  upfront  amount  against  monthly  payment,  liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100% Foreign Direct Investment (FDI) through automatic route and revenue sharing model based on the National Coal Index

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