Coal gasification scheme: Govt opens ₹37,500 crore project applications
Synopsis
India has opened the gates on its most ambitious coal gasification push yet — a ₹37,500 crore scheme that could reshape the country's chemicals and energy import bill. With the RFP out and a September deadline set, the real question is whether domestic and global players will bet on syngas economics at scale.
Key Takeaways
The Ministry of Coal has invited applications under the ₹37,500 crore Surface Coal/Lignite Gasification scheme, approved in May 2025 .
The Request for Proposal (RFP) was published on 7 July ; the application deadline is 7 September .
A pre-application conference will be held on 20 July to clarify scheme provisions for prospective applicants.
Coal gasification produces syngas used to manufacture methanol , ammonium nitrate , synthetic natural gas , and industrial chemicals.
Government roadshows were held in Delhi and Hyderabad in June to attract industry and investor participation.
The Ministry of Coal has formally invited applications under the Scheme for Promotion of Surface Coal/Lignite Gasification Projects, backed by a government-approved financial outlay of ₹37,500 crore. The scheme, cleared by the government in May 2025, aims to accelerate domestic coal and lignite gasification capacity, reduce India's import dependence, and deepen value addition in the energy and chemicals sectors.
Key Dates and Application Process
The scheme's guidelines were released on 25 June, followed by the publication of the Request for Proposal (RFP) on 7 July. The Ministry of Coal will host a pre-application conference on 20 July to walk prospective applicants through scheme provisions and address queries. The deadline for submitting applications is 7 September.
All relevant documents — including the Scheme Guidelines, RFP, and application timeline — are available on the official Ministry of Coal website. Eligible entities are urged to review the materials ahead of the conference.
What Coal Gasification Does
Coal gasification converts coal into synthesis gas (syngas), which serves as a feedstock for producing value-added commodities including methanol, ammonium nitrate, synthetic natural gas, and a range of industrial chemicals. The technology is seen as a strategic lever to diversify domestic coal use beyond power generation and reduce dependency on imported petrochemicals and fertiliser inputs.
Government's Push: Roadshows and Policy Backing
Ahead of the RFP launch, the government conducted coal gasification roadshows in Delhi and Hyderabad in June, bringing together policymakers, industry leaders, technology providers, and investors. The sessions focused on policy support, technological innovation, investment opportunities, and project implementation strategies — signalling the Centre's intent to move beyond announcements toward active deal-making.
This comes amid India's broader push for energy self-reliance, with coal gasification positioned as a bridge technology that monetises the country's vast domestic coal reserves while reducing the import bill for chemicals and fuels.
What Happens Next
With the pre-application conference set for 20 July and submissions closing on 7 September, the ministry is expected to evaluate proposals through the final quarter of 2025. Industry observers will watch whether the ₹37,500 crore outlay draws participation from large domestic conglomerates and international technology licensors — both of whom attended the June roadshows. The scheme's success will hinge on competitive project economics and the government's ability to de-risk early-mover investments.
Point of View
500 crore coal gasification scheme is a serious fiscal commitment, but the harder challenge is commercial viability. Syngas-to-chemicals projects are capital-intensive, technology-dependent, and sensitive to feedstock pricing — areas where India has historically struggled to attract risk capital at scale. The June roadshows suggest the government is aware it needs to sell, not just announce. Whether the incentive structure in the RFP is generous enough to crowd in private investment — rather than just state-owned enterprises — will determine if this scheme moves the needle on import substitution or becomes another well-funded blueprint that stalls at implementation.
NationPress
9 Jul 2026
Frequently Asked Questions
What is the ₹37,500 crore coal gasification scheme?
It is a central government scheme — the Scheme for Promotion of Surface Coal/Lignite Gasification Projects — approved in May 2025 with a financial outlay of ₹37,500 crore. It aims to promote the conversion of domestic coal and lignite into syngas for use in producing methanol, synthetic natural gas, and industrial chemicals, thereby reducing India's import dependence.
Who can apply and what is the deadline?
Eligible entities — including private companies, public sector units, and joint ventures — can apply by submitting proposals before 7 September 2025. The Request for Proposal and Scheme Guidelines are available on the Ministry of Coal website.
What is the pre-application conference on 20 July?
The Ministry of Coal will hold a pre-application conference on 20 July to explain scheme provisions, clarify application procedures, and address stakeholder queries. Prospective applicants are encouraged to attend and submit questions in advance.
What products can be made from coal gasification?
Coal gasification produces synthesis gas (syngas), which can be processed into methanol, ammonium nitrate, synthetic natural gas, and a range of industrial chemicals — products India currently imports in significant volumes.
Why is the government promoting coal gasification now?
The government views coal gasification as a strategic tool to monetise India's large domestic coal reserves, cut the import bill for chemicals and fuels, and advance energy self-reliance. Policy support has been building since at least 2021, with the ₹37,500 crore scheme representing the largest single financial commitment to the sector to date.
