India to allow more state-run companies to sell coal

NEW DELHI (Reuters) - India will allow more state-run companies to sell coal to industry, according to a government statement on Wednesday, in a bid to bolster the country's coal production and reduce imports.

A cabinet meeting chaired by Prime Minister Narendra Modi cleared the plan that will give federal and state companies the flexibility to sell excess coal.

Until now, nearly all companies have only been allowed to mine for their own use.

"It is expected that the incremental coal produced from such coal mines would cater to the unmet demand of the coal in the country ... and bridge the gap between demand and supply considerably," the statement said.

At present, only government-backed Coal India Ltd and a company run jointly by the federal government and a state are permitted to mine commercially.

Record production from Coal India has driven a turnaround in the industry, but the government wants more companies to start mining to help meet the target of more than doubling the country's total output to 1.5 billion tonnes by 2020.

(Reporting by Krishna Das and Sankalp Phartiyal; Writing by Krishna Das; Editing by Mark Potter)