India Accelerates Coal Gasification Projects to Cut Import Dependence, Says Kishan Reddy

Speaking at the KPMG Agrasar Bharat Manch 2026 in New Delhi, Reddy highlighted the government's push to convert coal into value-added products such as synthesis gas (syngas), ammonia, urea and methanol. He said the initiative was aimed at expanding domestic industrial production and creating alternatives to imported resources.

Reddy described coal as a critical industrial raw material, noting that it continues to meet around 55 per cent of India's primary energy needs and accounts for approximately 74 per cent of electricity generation.

He said the government was working to advance commercial-scale coal gasification projects as part of its broader strategy to make greater use of domestic coal resources.

Cabinet approves coal gasification scheme

The Union Cabinet has approved a scheme to promote surface coal gasification projects with a financial outlay of Rs 37,500 crore, marking a significant step in the expansion of India's coal gasification programme.

The initiative supports the national target of gasifying 100 million tonnes of coal by 2030. It is intended to strengthen energy security and reduce reliance on imports of products such as liquefied natural gas (LNG), urea, ammonia and methanol.

The government is seeking to expand the use of coal beyond conventional power generation by converting it into industrial feedstock and chemicals that can support domestic manufacturing.

India explores overseas critical mineral assets

Reddy also highlighted efforts to increase domestic production of critical minerals and secure overseas mining assets for exploration and extraction.

These minerals are essential for manufacturing electric vehicles, telecommunications equipment, solar power systems and defence hardware. Securing reliable supplies has become an important priority as India seeks to expand its high-technology and clean-energy industries.

“We are currently exploring the mines of Argentina and simultaneously having discussions with other countries,” Reddy said.

He added that the government was encouraging Indian entrepreneurs to explore opportunities abroad in the exploration and processing of critical minerals.

In 2025, Mineral Exploration and Consultancy Limited (MECL), a public sector undertaking under the Ministry of Mines, signed a memorandum of understanding with the provincial government of Catamarca in Argentina to strengthen cooperation in mineral exploration and resource development.

Reddy identified Argentina as an important partner because of its substantial lithium reserves. Lithium is a key input for electric vehicle batteries and energy storage systems used in renewable power infrastructure.

Rare earth corridor planned across four states

The minister also said the government was developing a rare earth element corridor spanning Kerala, Tamil Nadu, Andhra Pradesh and Odisha.

He expressed confidence that these initiatives would strengthen India's domestic rare earth capabilities and reduce dependence on external supplies.

Rare earth elements are used in a range of advanced technologies, including electronics, renewable energy equipment and defence applications.

The coal gasification programme, overseas mineral exploration and proposed rare earth corridor form part of the government's broader efforts to strengthen domestic resource security, expand industrial capacity and reduce import dependence.