The Centre’s ₹37,500 crore scheme to promote coal and lignite gasification has received seven applications in its first bidding round, with Adani Enterprises submitting bids for three projects aimed at producing urea, the Ministry of Coal said on Tuesday.
The other applicants include state-run NTPC Ltd and Talcher Fertilizers, as well as private sector companies Gallantt Ispat and Shyam SEL & Power.
NTPC and Shyram SEL & Power have proposed synthetic natural gas (syngas) projects, while Gallantt Ispat has applied for a project to produce direct reduced iron (DRI) and syngas. Talcher Fertilizers has proposed a urea project.
This comes against the backdrop of reports flagging concerns over the ability of the government’s flagship coal gasification programme to attract bidders. The coal ministry said that the seven applications represented a “vote of confidence” in the scheme and in India’s coal gasification mission.
“When we said reports of ‘no takers’ were premature, we were confident that industry would respond, and it has, decisively. Seven applications in the very first round, including from some of India’s largest industrial houses and public sector undertakings, are a clear vote of confidence in the scheme and in the National Coal Gasification Mission. The market has spoken, and it has spoken loudly.” said Alok Kumar Singh, advisor (projects), Ministry of Coal.
The scheme, approved by the Union Cabinet in May, seeks to support the development of 75 million tonnes (mt) of coal gasification capacity by 2030 and contribute to the national target of 100 mt of coal gasification capacity by the same year. The Centre estimates that the scheme could catalyse investments of ₹2.5-3 trillion and generate direct and indirect employment across the value chain.
Coal gasification involves converting coal into syngas, which can be used subsequently to produce products such as urea, methanol, ammonia, hydrogen and syngas. The government has designed the scheme to reduce India’s dependence on imports of liquefied natural gas (LNG), urea, ammonia and methanol. These products together accounted for imports worth around ₹2.77 trillion in 2024-25, according to the ministry.
The latest programme builds on an earlier ₹8,500-crore financial incentive scheme approved in 2024, under which eight gasification projects are already under implementation.
The first-round applications indicate a strong interest in fertiliser production, with four of the seven projects targeting urea. Adani Enterprises has proposed three urea projects, while Talcher Fertilisers has proposed one.
Applications received in the first round will now undergo detailed evaluation under the scheme guidelines and the request for proposal.
Meanwhile, the Ministry of Coal has opened the second round of applications from Tuesday.
The application window under the scheme will open at two-month intervals, providing further opportunities for eligible companies to submit projects. The coal ministry said several prospective applicants were already at advanced stages of project preparation and are expected to participate in subsequent rounds.
“The entry of large players such as Adani and NTPC is significant because it indicates that coal gasification is beginning to be evaluated as a serious industrial investment proposition rather than only a policy-led initiative,” Atanu Mukherjee, CEO Dastur Energy, told Business Standard.
However, he added that the next phase of coal gasification will be determined by project economics. “Gasification projects are capital intensive, and their bankability will depend on technology suited to Indian coal, scale, long-term product offtake, competitive financing and effective carbon management,” Mukherjee said.
He said the government’s incentive framework can help absorb some of the early-stage risk, but ultimately these projects will have to demonstrate sustainable returns without being permanently dependent on subsidy.