Cabinet Approves CoalSETU Policy, PM Modi Says It Will Strengthen India's Energy Security

Prime Minister Narendra Modi on Friday announced that the Union Cabinet has approved the CoalSETU policy in its efforts to boost India’s energy security, reduce dependence on imported coal, bolster domestic availability and support Ease of Doing Business.

“The Cabinet has approved the CoalSETU policy, creating a new window to enable seamless, efficient and transparent utilisation of coal. It will support Ease of Doing Business, boost domestic availability and reduce dependence on imported coal. It is yet another important step towards strengthening India’s energy security and accelerating growth,” the PM said on X.

The Cabinet has approved the CoalSETU policy, creating a new window to enable seamless, efficient and transparent utilisation of coal.

It will support Ease of Doing Business, boost domestic availability and reduce dependence on imported coal. It is yet another important step…

— Narendra Modi (@narendramodi) December 12, 2025

According to an official statement, the Union Cabinet Committee on Economic Affairs, chaired by PM Modi, approved the Auction of Coal Linkage for Seamless, Efficient and Transparent Utilisation (CoalSETU) by creating a “CoalSETU window” in the NRS (Non-Regulated Sector) Linkage Policy for the utilisation of coal for any industrial use and exports.

The Policy will allow allocation of coal linkages on an auction basis for a long-term basis for any industrial use and export by adding a separate window named CoalSETU in the NRS (Non-Regulated Sector) Linkage Auction Policy of 2016, wherein any domestic buyer requiring coal can participate in the linkage auction.

According to the Cabinet Committee, the existing policy for there was a need to have a fresh look at the current arrangements of coal supplies to the NRS for the purpose of improving ease of doing business, and for accelerated utilisation of existing coal reserves and reducing dependence on imported coal for meeting India’s energy requirement. The government also sought to extend the linkages in NRS to coal consumers without any end-use restrictions.

In line with the opening of the coal sector for commercial mining, which allowed allocation of coal blocks without any end-use restrictions, this policy for the auction of coal linkages for NRS has been modified for allocation of coal linkages on an auction basis on long-term use for any industrial use and export by adding another window/sub-sector. Traders shall not be allowed to participate in the proposed window.

While the present auction of coal linkages for the specified end-user sub-sectors continues, the Cabinet has specified that the coal linkage obtained under the CoalSETU window shall be for own consumption, export of coal, or any other purpose (including coal washing) except resale in the country. Coal linkage holders will be eligible to export coal upto 50% of their coal linkage quantity.

Considering the demand for washed coal, which would increase in future, the coal linkages to the Washery operators will result in increased availability of washed coal in the country and consequently reduce imports, the release stated. Additionally, the washed coal will also find takers outside the country and therefore, the washed coal may also be used for the purpose of export.