Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU)

15.12.2025

Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU)

Context

The Union Cabinet has approved the creation of a new CoalSETU window under the Non-Regulated Sector (NRS) Linkage Policy, enabling long-term coal linkages for any industrial use and exports.

About Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU)

What it is?

CoalSETU is a new auction-based coal linkage window under the Non-Regulated Sector (NRS) Linkage Policy, allowing any domestic industrial buyer to secure long-term coal linkages for own use or export (up to 50%), except resale within India.

Ministry: Ministry of Coal, Government of India

Aim of the Policy:

• To ensure transparent, seamless, and efficient utilisation of domestic coal resources.
• To promote ease of doing business and reduce dependence on coal imports.
• To boost the availability of washed coal and support export opportunities.

Key Features

1. New CoalSETU Window in NRS Policy (2016):

• Allows any industrial consumer to participate in coal linkage auctions.
• Existing NRS auctions (for cement, sponge iron, steel, aluminium, and CPPs) will continue.
• These existing users may also bid in the CoalSETU window.

2. No End-Use Restrictions:

• Coal can be used for own consumption, washing, or export (up to 50%).
• Coking coal is excluded from this window.
• Traders are barred from bidding to prevent speculative hoarding.

3. Export Flexibility:

• Companies may export up to 50% of allotted coal.
• Washed coal is allowed for export.
• Coal can be shared across group companies as per operational needs.

4. Boost to Washery Operators:

• Encourages the growth of private washeries.
• Improves domestic supply of washed, cleaner coal.
• May reduce import dependence and improve export viability.

5. Alignment with Coal Sector Reforms:

• Complements the 2020 reform allowing commercial mining without end-use restrictions.
• Strengthens the fair, market-driven allocation of mineral resources.

Significance of the Policy:

• Promotes Transparent & Competitive Allocation: Auction-based linkages ensure fair market access and remove closed-door allocations.
• Reduces Import Dependence: By expanding domestic access and improving washed coal availability, industries can reduce reliance on costly imports.
• Supports Industrial Growth: Provides long-term assured coal supply to small, medium, and new industries previously excluded.

Conclusion

The CoalSETU policy is a significant step toward marketizing coal allocation in the Non-Regulated Sector. By promoting auction-based linkages with export flexibility and encouraging washed coal supply, it aims to enhance domestic industrial competitiveness and reduce import dependency, aligning with broader coal sector reforms.