Page 59 - Policy Economic Report - April 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

The graph illustrates a steady and progressive upward trend in both coal production and dispatch over
the past four years. The sustained increase in dispatch underscores more efficient logistics, streamlined
evacuation, and a stronger, more resilient coal supply chain.

This landmark achievement is a strong reflection of India’s commitment to Aatmanirbhar Bharat, driven
by focused policy interventions, streamlined approvals, and a renewed thrust on enhancing domestic coal
production. It underscores the Ministry’s sustained efforts to create an enabling ecosystem for captive
and commercial mining, thereby reducing import dependence and strengthening national resource
security.

Building on this momentum, the achievements of FY 2025–26 reinforce the coal sector’s central role in
advancing the vision of Viksit Bharat 2047. With continued emphasis on efficiency, scalability, and
responsible mining practices, the sector is well-positioned to drive industrial growth, support economic
expansion, and ensure a resilient and future-ready energy framework for the nation.

India Strengthens Energy Security: Historic First — Coal Mine Development Agreements with
Underground Coal Gasification Provisions Signed

In a landmark milestone for India's energy transition and self-reliance, the Ministry of Coal executed Coal
Mine/Block Production and Development Agreements (CMDPAs) with successful bidders for four coal
mines — marking the first-ever tranche of commercial coal mines in India to carry embedded provisions
for Underground Coal Gasification (UCG). This historic step signals a transformative leap in how India
envisions and unlocks the full value of its vast coal reserves.

The agreements were executed under the 14th round of commercial coal mining auctions, with Reliance
Industries Limited securing the Recherla and Chintalpudi Sector A1 mines, and Axis Energy Ventures India
Private Limited bagging the Dip Extension of Belpahar and Tangardihi East coal mines. These mines spans
across the states of Andhra Pradesh and Odisha with two being partially explored and two fully explored
mines.

UCG represents a revolutionary approach to coal utilisation — one that converts coal into synthetic gas in
situ, directly within the seam, without the need for conventional mining. This technology unlocks energy
from deep, thin, or otherwise unworkable coal seams that traditional extraction methods cannot
economically access, significantly expanding India's exploitable energy resource base. By integrating UCG
provisions into CMDPAs for the first time, the Ministry of Coal has future-proofed these mines, enabling
operators to pursue this cutting-edge pathway to cleaner and more efficient energy production alongside
conventional extraction.

The introduction of UCG provisions reflects India's commitment to not only maximising domestic coal
production, but also adding value addition to the coal economy by substituting the derivate products
potentials the coal possesses. The syngas produced through UCG can serve as a domestic feedstock for
the manufacture of urea and ammonia, significantly reducing India's dependence on imported fertilisers
and strengthening food security. In the chemicals and petrochemicals sector, UCG syngas can replace

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