Union Coal and Mines Minister G. Kishan Reddy on Tuesday, 21 July 2026, announced that the government has approved a new ₹37,500 crore incentive scheme to accelerate the National Coal Gasification Mission, bringing total government incentives to ₹46,000 crore as India pushes toward a target of 100 Million Tonnes (MT) of coal gasification capacity by 2030.

Context

In his post on X, the minister stated that India is 'steadily advancing towards a cleaner, more self-reliant, and energy-secure future' under the leadership of Prime Minister Narendra Modi. He highlighted that 22.6 MTPA of gasification capacity is currently operational or under implementation — comprising 8 MTPA by Jindal Steel Limited, 2.6 MTPA by Talcher Fertilisers Limited, and 12 MTPA spread across eight projects approved under the earlier ₹8,500 crore incentive scheme. The newly approved scheme raises the total incentive outlay to ₹46,000 crore, targeting coal-to-chemicals, methanol, and Synthetic Natural Gas production.

Policy Backdrop

The National Coal Gasification Mission was conceived to convert domestic coal and lignite into syngas, reducing India's dependence on imported natural gas, methanol, and petrochemicals. The policy lineage stretches back to gasification pilots from the 2000s, but the current scale-up — with a formal 100 MT by 2030 roadmap — took shape around 2020–21 as part of the broader Atmanirbhar Bharat framework. The earlier ₹8,500 crore scheme seeded the initial pipeline of projects; the fresh ₹37,500 crore allocation is intended to bring significantly larger private and public investment into the sector. The Ministry of Coal serves as the nodal body overseeing project approvals, tendering, and capacity tracking.

India is the world's second-largest coal producer, and policymakers have long sought to maximise the value of domestic reserves beyond power generation. Gasification offers a pathway to produce industrial chemicals and cleaner fuels domestically, which could reduce the country's import bill and improve energy security simultaneously.

Stakeholders and Impact

The scheme directly benefits coal mining companies, fertiliser producers, and chemical manufacturers who invest in gasification infrastructure. Jindal Steel Limited and Talcher Fertilisers Limited — a joint-venture fertiliser project in Odisha — are among the anchor entities already in the implementation pipeline. Methanol and Synthetic Natural Gas produced through gasification can feed into transport fuels, city gas distribution networks, and agricultural inputs, broadening the downstream impact across multiple sectors. Reduced dependence on imported natural gas also carries macroeconomic benefits by easing pressure on the current account.

What's Next

The immediate focus will be on rolling out the new ₹37,500 crore scheme — including project approvals, tendering timelines, and commissioning milestones — all tracked by the Coal Ministry against the 2030 deadline. With only 22.6 MTPA of the 100 MT target currently operational or under implementation, the bulk of capacity addition must materialise over the next four years. The scale of the incentive package signals that the government intends to draw in large private-sector commitments to bridge that gap, and project-level announcements are likely to follow in the months ahead.