India Fast-Tracks Coal Gasification Programme to Cut Import Dependence, Says Kishan Reddy

Speaking at the KPMG Agrasar Bharat Manch 2026 in New Delhi, Reddy said the government was advancing plans to convert coal into value-added products such as synthesis gas (syngas), ammonia, urea and methanol.

He described coal as an important industrial raw material and noted that it continues to meet around 55 per cent of India's primary energy requirements and accounts for approximately 74 per cent of its electricity generation.

The minister said the government was seeking to encourage commercial-scale coal gasification projects to make greater use of domestic coal resources and reduce reliance on imported products.

Coal gasification scheme targets 100 million tonnes by 2030

The Union Cabinet has approved a scheme to promote surface coal gasification projects with a financial outlay of Rs 37,500 crore. The initiative is intended to accelerate the country's coal gasification programme and support the national target of gasifying 100 million tonnes of coal by 2030.

The programme aims to strengthen domestic supply chains and reduce dependence on imports of key products, including liquefied natural gas (LNG), urea, ammonia and methanol.

The headline figure of Rs 46,000 crore cited in the announcement refers to the broader investment push, while the Cabinet-approved scheme specifically carries an outlay of Rs 37,500 crore.

India explores overseas critical mineral resources

Reddy also highlighted the government's efforts to increase critical mineral production and explore overseas mining assets for the extraction and processing of strategic resources.

Critical minerals are essential for manufacturing electric vehicles, telecommunications equipment, solar power systems and defence hardware. Securing reliable supplies has become increasingly important as India expands its clean-energy and advanced manufacturing sectors.

“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 overseas in critical mineral exploration and processing.

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

Argentina, which holds substantial lithium resources, is an important potential partner for India in securing minerals needed for electric vehicle batteries and renewable energy storage, the minister said.

Rare earth corridor planned across four states

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

He expressed confidence that the initiative would strengthen domestic capabilities and help India move towards self-sufficiency in rare earth elements.

These minerals are used in a range of advanced technologies, including electronics, renewable energy equipment and defence systems.

The coal gasification programme, overseas mineral exploration and proposed rare earth corridor are part of India's wider efforts to strengthen resource security, expand domestic industrial production and reduce dependence on imports.