A report by Alvarez & Marsal says domestic coal gasification could replace ₹1.96tn of annual imports while creating new manufacturing capacity in chemicals, fertilisers and industrial gases.
India could cut annual imports of industrial products worth ₹1.96 trillion by building a domestic coal gasification industry, according to a report by Alvarez & Marsal that argues the process could turn the country’s coal reserves into a feedstock for chemicals, fertiliser and industrial gases. The consultancy said the case for gasification goes beyond replacing imports of natural gas, urea, ammonia and methanol, pointing to a wider industrial ecosystem that could emerge around the technology.
The report, released at the Gasification India 2026 event, said imports of gasification-linked products in the last financial year included ₹1.18 trillion of natural gas, ₹46,000 crore of urea and ₹9,600 crore of ammonia and methanol. It argued that domestic production could reduce exposure to global price swings and ease pressure on foreign exchange reserves, although it stressed that the economics would depend on competitive production costs and the need to import some inputs.
Beyond the immediate import bill, Alvarez & Marsal said coal gasification could support a much broader manufacturing chain. The process would require gasification equipment, air-separation units, syngas-cleaning systems, pipelines and shared utilities, as well as downstream plants making chemicals and fertilisers. That view fits with the government’s own ambitions: the Ministry of Coal has projected investment of ₹2.5 trillion to ₹3 trillion and about 50,000 direct and indirect jobs across roughly 25 projects.
India’s coal base gives the strategy a further argument, the report said. The country has the world’s fifth-largest coal resource base, with 400 billion tonnes of geological resources, and nearly 44% lies deeper than 300 metres, where conventional mining is often difficult or uneconomic. The report said underground coal gasification could make some of those deposits usable by converting coal into syngas underground rather than bringing it to the surface, provided the geology, costs and environmental safeguards stack up.
Still, the report warned that a larger gasification sector will need more than policy intent. It called for faster clearances, time-bound approvals for land, environment and water, and financial support for first-of-a-kind projects. It also urged long-term offtake commitments from state-linked fertiliser, refining and steel buyers, alongside greater investment in domestic technology to adapt gasifiers to India’s high-ash coal and reduce reliance on foreign licensors. The broader backdrop is a government push to scale coal gasification, with industry reports this year pointing to an approved incentive scheme and a target of gasifying 100 million tonnes of coal by 2030.
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