India is reportedly planning to launch its first coal trading platform on the lines of commodity or energy exchanges. According to the proposal, entire coal produced in the country would be traded on the Coal Exchange, The Economic Times reported. Such an exchange would turn the coal sector
into an open market with no barriers to free-market activity. The electronic system based trading exchange is expected to pioneer the development of coal trading in India and provide an online platform to the various participants in the market.
With the Coal Exchange becoming reality, the fuel supply agreements of Coal India are likely to end. However, the state-run Coal India may continue to maintain its monopoly in the segment on account of its huge production target of one billion tonnes by 2024, the report also quoted an unidentified official as saying.
Meanwhile, the country's coal import fell by 20 per cent to 18.93 million tonnes (MT) last month, industry data showed. The government is planning to bring the country's 'avoidable coal imports' to zero by 2023-24.
The country's coal imports increased marginally by 3.2 per cent to 242.97 MT in 2019-20. Coal India Limited (CIL), which accounts for over 80 per cent of the domestic fuel output, has been mandated by the government to replace at least 100 MT of imports with domestically-produced coal in the ongoing fiscal.
Coal Minister Pralhad Joshi had recently written to state chief ministers asking them not to import coal and take domestic supply from CIL, which has the fuel in abundance. Prime Minister Narendra Modi had also given directions to target thermal coal import substitution, particularly when huge coal stock inventory is available in the country this year.