India could avoid annual imports worth Rs. 1.96 tn by developing a domestic coal gasification ecosystem, according to a report by accounting and consultancy firm Alvarez & Marsal. The ecosystem could convert raw coal into value-added products such as natural gas, urea, ammonia, methanol and acetic acid.

India imported gasification-relevant products worth substantial sums in the last financial year, including Rs. 1.18 tn of natural gas, Rs. 460 bn of urea and Rs. 96 bn of ammonia and methanol, among other products. Domestic production could partially replace these imports, reduce exposure to global price volatility and improve foreign exchange resilience, subject to competitive production costs and imported input requirements.

The report, released at the Gasification India 2026 event, said integrated projects would require gasification equipment, air-separation units, syngas-cleaning systems, pipelines and utilities. Downstream chemical manufacturing facilities could share infrastructure and help create industrial clusters beyond coal-mining operations.

The Ministry of Coal has projected investment of Rs. 2.5-3 tn and 50,000 direct and indirect jobs across around 25 projects under its gasification development ambitions. India has the world’s fifth-largest coal resource base, with 400 bn t of geological resources. At least 175 bn t, or around 44 per cent, are located at depths exceeding 300 metres and some could be difficult or uneconomic to extract through conventional mining.

Underground coal gasification could convert suitable deep-seated coal into syngas in situ, potentially expanding the economically usable portion of domestic resources. The report said products made through gasification could have a value between five and 20 times that of coal sold without processing. It called for single-window clearances, time-bound land, environmental and water approvals, viability-gap or capital support, long-term offtake commitments, indigenous technology development, pilot plants and demonstration units to support first-of-a-kind projects and adapt gasifiers to high-ash Indian coal.