October 24, 2026 - India is seeking to extract greater industrial value from its coal reserves as the government expands coal gasification, develops critical mineral processing capacity and encourages domestic companies to secure mineral assets overseas. Union Minister of Coal G Kishan Reddy said the government had provided a Rs. 46,000 crore financial push for the experimental phase of coal gasification as it seeks to reduce import dependence and develop downstream industries.

Addressing the KPMG Agrasar Bharat Manch 2026 event on Friday, Reddy said the government wanted to move beyond coal's traditional role in power generation and use it to manufacture chemicals and other industrial inputs. “We are not looking at coal only as an energy source, but also as an important industrial raw material,” Reddy said.

The government aims to use coal gasification to produce syngas, ammonia, urea, methanol and other chemicals. Reddy said commercial-scale projects were also progressing, while the government was pursuing both underground and surface coal gasification.

He said several coal blocks had entered the auction or memorandum of understanding process for gasification-related initiatives. The government expects these projects to support domestic manufacturing and reduce reliance on imported industrial inputs.

Coal Gasification Moves Forward

Coal remains central to India's energy security even as the country expands its renewable energy capacity. Reddy said coal met around 55 percent of India's primary energy needs and supported more than 70 percent of electricity generation.

India had also crossed the one-billion-tonne coal production mark, he said. The next phase of development would place greater emphasis on efficiency, technology and private-sector participation. The gasification programme represents an effort to expand coal's industrial applications. Instead of relying exclusively on conventional coal consumption, the government wants to create domestic production capacity for chemicals that serve as inputs for other industries.

The commercial viability of this strategy will depend on project execution, technology deployment and the ability of downstream industries to absorb the resulting output. Reddy did not disclose the commissioning timelines or expected production capacity of the commercial-scale projects during his address.

Critical Minerals Take Priority

Alongside coal gasification, the government is seeking to develop domestic capabilities across the critical mineral value chain, from exploration and extraction to processing, recycling and manufacturing. Reddy said four major critical mineral processing plants were being developed in Gujarat, Maharashtra, Andhra Pradesh and Odisha. He also referred to plans for rare earth element corridors across Kerala, Tamil Nadu, Andhra Pradesh and Odisha.

“We want to establish exploration, extraction, processing, recycling and manufacturing across the entire value chain in India,” he said. The government is also promoting indigenous technologies and scientific capabilities through centres of excellence, Reddy said. Recycling would receive greater attention as India seeks to recover valuable materials from electronic products and other sources.

The strategy aims to strengthen domestic processing capacity rather than limit India's participation in the mineral value chain to the extraction of raw materials. However, the minister did not provide investment figures or commissioning schedules for the four processing plants.

Overseas Assets In Focus

The government's mineral strategy also extends to overseas acquisitions. Reddy said India was encouraging domestic entrepreneurs to acquire critical mineral assets in other countries, develop processing capabilities and secure supplies for Indian industry. “We are going abroad to acquire critical mineral mines,” he said.

Reddy referred to lithium assets in Argentina and said the government was discussing opportunities with other countries. He also said he would travel to Australia for a global mining summit and engage with international counterparts on investment opportunities alongside Indian entrepreneurs.

The approach seeks to complement domestic mineral development with access to overseas resources. However, Reddy did not disclose the value of the Argentine lithium assets, the ownership structure or the status of additional acquisition discussions.

Private Investment Drives Expansion

Reddy described private industry as a key partner in India's industrial transformation. He said the government would establish the policy and regulatory framework, while businesses would contribute investment, technology, innovation and employment. He highlighted developments in electronics, semiconductors, defence, automobiles, pharmaceuticals and clean energy as evidence of India's expanding manufacturing base.

According to Reddy, electronics production had increased from around Rs. 1.9 lakh crore to more than Rs. 14 lakh crore. He also referred to more than Rs. 1.6 lakh crore in approved investments in the semiconductor ecosystem and said India's installed renewable energy capacity had crossed 300 GW. “Self-reliance does not mean isolation. It means building domestic capabilities while remaining deeply integrated with the global economy,” he said.

Reddy also called for stronger collaboration between the government, industry, academia and investors to develop new technologies and domestic value chains. He said reforms and improvements in the ease of doing business remained important to attracting investment across sectors.

Viksit Bharat Remains Target

Reddy reaffirmed the government's ambition to make India a developed nation by 2047 and described the objective as a shared national responsibility. “Viksit Bharat 2047 is a shared national ambition,” he said. He called for coordinated efforts by the government, industry, investors and citizens to expand infrastructure, create jobs, improve governance and strengthen India's economic position.