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The Ministry of Coal in India plans to propose a ₹35,000 crore incentive package for coal gasification projects, a significant increase from the current ₹8,500 crore, ahead of the Union Budget 2026. This initiative aims to de-risk investments for Public Sector Undertakings (PSUs) and private entities, supporting the National Coal Gasification Mission's target of 100 million tonnes by 2030.

The funding aims to enhance domestic production of Ammonia, Methanol, and Urea, reducing reliance on imported natural gas and fertilizers. The new Viability Gap Funding structure is expected to benefit major companies like Coal India Ltd, BHEL, and NTPC.

Currently, India imports around 83% of its oil and 90% of its methanol, and the proposed package could reduce the national import bill by approximately $15 billion annually. This initiative builds on the initial framework from early 2024, expanding funding categories to prioritize high-value derivatives and revitalize stranded gas-based power plants.