Talking to the media after attending the Asian Athletics Association Council meeting, Coe said athletics officials in India should take up the challenge, generate revenues and take the sport to a new level.
"With its love for sport, its population, the great interest in broadcasting and commercial opportunities, India can make a mark. That is important for us," Coe said, ahead of the 22nd Asian Athletics Championships which begins at the Kalinga Stadium from Thursday.
He described the Asian Athletics Championships as an important development for track and field sport in the continent in general and India in particular.
Coe said the arrangements at the warm-up track at the Kalinga Stadium were of high quality.
"I spent some time there and interacted with some athletes. I can tell you they are pleased with the arrangements there," he said, adding that he was delighted to be visiting the capital city of Odisha for the first time.
"A sport has to innovate and stay relevant," he said, citing the examples of Indian Premier League and other Twenty20 cricket games, rugby sevens, an adapted version of golf and even the changes in the rules in hockey.
Coe said the IAAF was working to streamline the athletics calendar, the nature of competition and to make high profile athletes support their member federations in fostering the sport.
"Our sport is a lot cleaner now with good technology and processes in place," Coe said, in response to a question on the doping menace in athletics.
"More important, the will among most federations and coaches to make our sport free, fair and open is strong," said Coe, whose maternal grandfather was a Punjabi.
The IAAF President hit out at the possible role of managers and agents of athletes in preventing head to head competitions that would make the sport more appealing.
Coe also said athletics was the toughest sport on the planet.
"At World Championships, if you look up the roof of the stadium, you will find the flags of 200 nations. It's tougher to win in our sport which demands a long apprenticeship period," he said, suggesting that nations need to enhance their athletics programmes in schools besides developing a sound coaching structure.
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