Vikram Dev Dutt, who is Secretary of the Coal Ministry, said India can save around ₹1.5 lakh crore worth of foreign exchange within the next five to seven years using coal gasification projects. It can be saved through import substitution. The central government is offering financial incentives of ₹46,000 crore through two programs for coal gasification projects. Dutt made this announcement when he addressed the fourth conference of mining ministers on reforms in the mining and coal sector in South Goa.
Coal gasification is the process where coal is converted into syngas. There can be several products from it which India has been importing in huge amounts. Dutt said that coal gasification is an important means of industrial diversification and regional development. He advised states which have coal production capabilities to formulate a favorable policy regime for attracting investments. Dutt described “mining with prudence” as a guiding principle for responsible miners. He also emphasized the sector’s employment potential. Gasification plants will create jobs in downstream industries, benefiting skilled and semi-skilled workers. Additionally, they will strengthen local supply chains and generate additional economic activity.
Coal gasification can produce products such as methanol, ethanol, and ammonium nitrate. These are also used as inputs for explosives and direct reduced iron (DRI)-based steel production. Odisha and Maharashtra have already initiated incentive policies to promote coal gasification. Projects are being established in Odisha’s Angul district and Maharashtra’s Chandrapur region. Coal-rich states such as Jharkhand, Chhattisgarh, and Odisha have also been urged to develop policies that encourage investors. These projects require substantial initial capital investment and state support for power, water supply, and taxation.