- India's coal demand is projected to reach 1.6 billion tonnes by 2030 due to growth in energy and industry
- A national coal exchange will replace the current one-to-many sales with a many-to-many trading platform
- The exchange will enhance risk management by acting as a central counterparty for clearing and settlement
India's coal demand is projected to rise to around 1.6 billion tonnes by 2030, driven by continued growth in electricity generation, infrastructure and industrial activity, Coal Secretary Vikram Dev Dutt said while outlining the government's plans to reform coal trading.
The secretary added, as per the Hindu Businessline,"Coal exchanges will also allow the exchange to function as a central counterparty for clearing and settlement, thereby improving risk management for both buyers and sellers."
A key element of the proposed reform is a national coal exchange that would replace the existing “one-to-many” sales structure with a “many-to-many” trading platform. The system would enable multiple buyers and sellers to participate simultaneously, allowing market-based prices to emerge through competitive bidding.
The proposed exchange could provide commercial and captive coal miners with access to a broader pool of buyers, while consumers would be able to source coal from multiple domestic producers instead of depending primarily on individual suppliers.
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The platform is also expected to strengthen clearing and settlement mechanisms and improve risk management in the coal market. Over time, the exchange could provide the foundation for a coal derivatives market, allowing producers and consumers to hedge against price fluctuations and manage supply-related risks.
India's domestic coal production crossed the 1 billion-tonne mark for the first time in 2024-25 and maintained the milestone in 2025-26, strengthening the country's position on domestic coal availability and energy security, reported The Hindu Businessline.
The proposed market reforms come as India continues to expand renewable energy capacity, although coal remains a major source of electricity and industrial energy.
The government's broader objective is to create a competitive, transparent and efficient coal market capable of meeting rising demand while improving price discovery and market access.
With demand expected to reach 1.6 billion tonnes by 2030, policymakers see market-based trading as an important step in preparing India's coal sector for the next phase of growth.
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