The Indian Cabinet Committee on Economic Affairs has introduced a new policy that allows owners of domestic coal mines that produce solely for their own use, known as captive coal mines, to sell 25% of their production on the open market. This is meant to increase competitiveness in the auction process and eventually lead to higher revenue for the government. Until now, owners of captive coal mines were mandated to sell excess coal mined to the state-run coal mining company Coal India.
The government is looking forward to ending state control over the domestic coal mining sector and this move comes a year after after it ended Coal India's monopoly and approved a new commercial coal mining policy. Coal mines are now auctioned on an online transparent platform and both Indian and foreign private coal companies are able to bid for mines from which they can sell all the output in the open market without any end-use price restrictions.
India is the world’s second largest coal and lignite producer after China. Coal India represented almost 85% of the country's coal output in fiscal year 2018 (April 2017-March 2018), while coal accounts for 3/4 of the domestic power generation.