Jan 2 – State-owned miner Coal India Ltd has opened its e-auctions to overseas buyers from neighbouring Bangladesh, Bhutan and Nepal, responding to weaker domestic demand for coal used in power generation.
Following the announcement, Coal India shares extended their rally, rising over 6% to ₹426, their highest level in more than a year. The stock had already gained around 4.5% earlier in the session.
India’s coal-based power generation has declined in seven of the last twelve months, largely due to increasing adoption of renewable energy. Reflecting this trend, Coal India’s coal supplies to consumers fell 2.2% year-on-year during the April–December period.
In December, the Indian government cleared the export of surplus coal from power plants, paving the way for broader participation in international markets.
According to data from coal trading firm I-Energy Natural Resources, India exported around 1.54 million tonnes of coal in the year ended November, with most shipments going to Bangladesh, Nepal and Bhutan. Until now, buyers in these countries largely sourced coal through intermediaries.
Analysts believe the policy shift could support Coal India’s profitability. “Muted domestic demand has pressured e-auction premiums this year. Allowing foreign buyers direct access should help improve margins and counter declining offtake volumes,” said Rupesh Sankhe, research analyst at Elara Securities.
However, industry executives caution that the move may not lead to higher volumes. “Neighbouring countries were already purchasing Coal India’s coal through traders. Direct auction participation is likely to replace that demand rather than create new demand,” said Vasudev Pamnani, Director at I-Energy Natural Resources.
Pamnani also noted that logistics and port-related costs reduce India’s competitiveness compared to Indonesia, which remains a preferred supplier to Bangladesh due to lower costs and more efficient infrastructure.
