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India Approves CoalSETU, Opening Long-Term Coal Linkages to Exports

The new auction window lifts end-use limits to channel surplus domestic coal to industry or export.

Overview

  • India’s Cabinet Committee on Economic Affairs cleared CoalSETU on December 12, creating a separate window under the 2016 NRS linkage policy for any industrial use and exports.
  • Linkage holders will be allowed to export up to 50% of their allocated coal, while coking coal is excluded and traders are barred from participating.
  • Fuel supply agreements under CoalSETU can run for up to 15 years with flexibility to allocate coal across group companies.
  • Coal obtained through the window may be used for own consumption, washing or export, and resale within India is prohibited.
  • Officials pointed to nearby buyers such as Nepal, Bangladesh, Bhutan and Sri Lanka as likely early markets as higher output helps curb thermal coal imports.