Recent years of reforms in the coal sector such as commercial coal mining by the private sector and free open market sale from captive mines have produced a surplus in the market, letting the state-run miner Coal India on Friday open up its e-auction to buyers from Bangladesh, Bhutan and Nepal.
With last summer being moderate, the demand for coal from the thermal power sector has been subdued, resulting in surplus fuel stocks at pitheads.
From Scarcity to Surplus
The development assumes significance because India had seen coal imports surging a couple of years ago, as thermal power stations increased capacity utilisation to meet power demand. Imported coal based plants at some point were asked by the government to operate at full capacity, despite their higher cost of power generation.
Coal India stock extended gains to trade more than 6% higher, the highest in more than a year on Friday.
The move will help in utilising the surplus coal resources better and promote transparency.
Earlier, access to Coal India’s produce by consumers across the borders was only through domestic coal traders who were allowed to buy and sell without any end-use restrictions.
“In a first, effective January 1, 2026, CIL has permitted coal consumers located in the neighbouring countries like Bangladesh, Bhutan and Nepal, who wish to import coal from India, to directly participate in the Single Window Mode Agnostic (SWMA) auctions conducted by the company,” CIL said in a statement.
The latest move follows a policy approved by the Cabinet last month allowing allocation of coal linkages on auction basis for any industrial use and exports by adding a separate window under a 2016 policy for non-regulated sectors (NRS) wherein any domestic buyer requiring coal can participate in the linkage auction.
“Tepid domestic coal demand this year has hit coal e-auction premiums for Coal India, so this move to level the playing field for foreign buyers will also help the company boost margins and reverse the trend of posting lower offtake volumes,” Reuters reported Rupesh Sankhe, a research analyst with Elara Securities, as saying.
Digital Transparency
SWMA auction is a unified, simplified e-auction system launched in 2022 to replace multiple existing auction windows (Spot, Special Spot, Forward) into one single platform. This makes coal procurement easier, transparent, and market-driven for all buyers.
All operational and procedural modalities have been included in the new scheme, with provisions for foreign buyers including one-time registration, digital bidding, advanced electronic payments and exports through notified logistics channels.
