India has auctioned 147 commercial coal blocks across nine states since the launch of the commercial coal mining auction system in June 2020. The government estimates that these blocks could generate around ₹47,500 crore in annual revenue, attract ₹55,000 crore in capital investment and create about 4.9 lakh jobs.
The commercial auction framework was introduced on June 18, 2020, following the cancellation of 204 coal blocks by the Supreme Court in 2014. The new system shifted coal block allocation towards an online, rules-based bidding process. Auctions are conducted in two stages through the MSTC platform, with no end-use restriction on the commercially auctioned mines. The policy also permits 100% foreign direct investment through the automatic route.
The auction process has attracted 44 new companies as successful bidders. Coal India subsidiaries Western Coalfields Ltd and Northern Coalfields Ltd have also participated in recent auctions, competing for blocks alongside private-sector bidders.
Revenue generated from the mines flows to coal-producing states through several channels, including competitively determined revenue share, statutory royalty, District Mineral Foundation contributions, National Mineral Exploration Trust payments and GST. Revenue from upfront and premium payments linked to allocated commercial mines stood at about ₹3,090 crore in FY 2025-26.
The expansion of commercial mining has also coincided with higher coal production. Output from commercial mines increased from 12.55 million tonnes in FY 2023-24 to 23.51 million tonnes in FY 2024-25. Combined production from captive and commercial coal blocks reached about 210 million tonnes in FY 2025-26, crossing the 200-million-tonne mark for the first time.
A decade earlier, captive and commercial blocks together produced 28.8 million tonnes. The government data puts the compound annual growth rate over the period at about 22%.
The auction framework has been presented as a mechanism to bring more participants into coal mining while increasing domestic production and revenue for coal-bearing states. The government has linked higher domestic output with reducing reliance on imported coal.
source: Press Release: Press Information Bureau
