Coal India Opens E-Auctions to Neighbouring Countries in Push to Boost Offtake
Coal India has taken a significant step to expand its market reach by allowing buyers from Bangladesh, Nepal and Bhutan to directly participate in its e-auctions, marking a shift in how the coal major engages with cross-border demand. The revised framework, effective January 1, 2026, enables foreign buyers to procure coal without routing purchases through Indian intermediaries.
The move is aimed at improving utilisation of surplus coal, enhancing transparency in sales, and supporting Coal India’s ambitious offtake targets at a time when domestic demand growth has shown signs of moderation.
Direct Participation Replaces Middlemen-Driven Purchases
Until now, coal consumers from neighbouring countries could access Coal India’s output only through Indian traders, who were permitted to buy and sell coal without end-use restrictions. Under the new framework, eligible buyers from Bangladesh, Bhutan and Nepal can participate directly in Coal India’s Single Window Mode Agnostic (SWMA) e-auctions.
By removing intermediaries, Coal India expects to streamline the procurement process for foreign buyers while ensuring clearer price discovery. The company said the change will allow overseas consumers to procure required quantities of coal more efficiently and on a transparent digital platform.
A senior Coal India official said, “Opening SWMA e-auctions to foreign buyers reflects CIL’s calibrated approach to market expansion while fully safeguarding domestic coal requirements. This step enhances transparency, competition and global market integration.”
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Stock Rallies as Investors Welcome Market Expansion
The announcement was well received by investors. Shares of Coal India surged 6.88% on the BSE on Friday to close at ₹427.90, the highest level in more than a year. Market participants said the rally reflects optimism that direct foreign participation could help absorb surplus volumes and support realisations over the medium term.
Analysts noted that the policy tweak signals proactive management as Coal India looks to diversify demand sources amid fluctuating domestic offtake trends.
Revised SWMA Framework Details Participation Rules
Coal India said it has incorporated all operational and procedural modalities for foreign buyers into the updated SWMA scheme. Under the revised framework, overseas buyers can now participate alongside domestic bidders in the same auction platform.
Key features of the new framework include:
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One-time registration for eligible foreign coal consumers
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Digital bidding through the SWMA e-auction platform
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Advance electronic payments in line with auction rules
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Exports through notified logistics channels
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Payments compliant with FEMA regulations
The company clarified that while buyers from Nepal may make payments in either Indian rupees or US dollars, buyers from Bangladesh and Bhutan will need to transact in US dollars, with valuation linked to the INR.
Strategic Dialogues Preceded the Policy Shift
Coal India said the decision followed consultations with prospective coal consumers from neighbouring countries to assess demand patterns and fine-tune enabling clauses. These discussions helped the miner understand the scale and nature of overseas requirements and align auction mechanisms accordingly.
The move also aligns with India’s broader objective of strengthening regional energy cooperation while leveraging surplus capacity in domestic coal production.
Ambitious Offtake Targets Add Context to the Decision
The policy change comes against the backdrop of Coal India’s ambitious offtake target of 900 million tonnes for the current financial year, representing an 18% year-on-year growth over last year’s achievement. However, recent offtake trends highlight the challenge of meeting that goal purely through domestic demand.
During the first nine months of the fiscal year, coal offtake declined 2.2% year-on-year to 544.7 million tonnes, compared with 557 million tonnes in the same period last year. December 2025 also saw a 5.2% decline, with offtake at 64.9 million tonnes versus 68.3 million tonnes a year earlier.
Against this backdrop, access to incremental demand from neighbouring countries could provide a timely cushion.
Transparency and Competition Key Benefits for Coal India
Beyond volume support, the company emphasised that allowing direct participation by foreign buyers would enhance transparency and competition in its e-auction process. With overseas consumers bidding directly, price discovery is expected to become more efficient, benefiting both the seller and serious end users.
Industry observers say this could also reduce arbitrage opportunities that sometimes arise when intermediaries dominate cross-border coal trade.
An energy sector analyst said, “Direct access for neighbouring countries is a logical step. It improves transparency and helps Coal India monetise surplus coal without distorting the domestic market.”
Domestic Supply Safeguards Remain Intact
Coal India has stressed that the revised framework does not compromise domestic coal availability. The company said the move has been calibrated to ensure that domestic consumers continue to receive priority, with foreign participation limited to specific auction channels.
By using the SWMA route, Coal India retains flexibility to balance domestic and export demand depending on market conditions.
What the Move Means for Investors
For investors, the decision signals a more outward-looking sales strategy and proactive management response to changing demand dynamics. Key takeaways include:
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Potential improvement in coal offtake utilisation
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Greater transparency and competition in e-auctions
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Increment know to incremental export-linked revenues
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Positive sentiment reflected in the stock’s sharp rally
While domestic demand remains the primary driver of Coal India’s volumes, the ability to tap regional markets directly adds a new lever to manage surplus production.
A Measured Step Toward Regional Market Integration
Coal India’s decision to open its e-auctions to buyers from Bangladesh, Nepal and Bhutan marks a meaningful evolution in its sales strategy. By blending domestic priorities with selective regional outreach, the coal major is positioning itself to better navigate demand fluctuations while reinforcing transparency and efficiency.
As the revised framework takes effect in 2026, investors and industry participants will closely watch how much incremental offtake this move delivers — and whether it becomes a template for deeper regional integration in India’s coal trade.
