 "CIL allows direct participation of foreign coal buyers in e-auction")
State-owned Coal India Ltd (CIL) has allowed coal consumers in neighbouring Bangladesh, Bhutan and Nepal to directly participate in its e-auctions, a move aimed at expanding buyer base as domestic coal offtake has weakened during this financial year.
Under the revised framework, effective 1 January, foreign buyers will be able to bid directly in the auctions. The e-auction mode accounts for around 10 per cent of CIL’s sales.
“Foreign buyers will participate at the same floor price as domestic buyers, and the premium discovered in the auction will be common for all participants,” a senior CIL official told Business Standard, while assuaging concerns over any preferential pricing for overseas consumers.
The shift comes at a time CIL is witnessing a historic decline in domestic coal offtake which fell 2.2 per cent in the April-December period compared to the same period last year. In December alone, the offtake fell 5.2 per cent.
Earlier, overseas buyers could access CIL’s coal only through Indian traders, who were allowed to buy and sell coal without end-use restrictions.
The revised mechanism was approved by CIL’s board recently, tweaking the auction framework, the company said in an exchange filing today.
Under the new system, foreign buyers will not face any cap on the volume of coal they can purchase through the auctions, the official said, signalling CIL’s intent to allow market-driven price discovery.
Coal evacuation will be carried out through rail, based on the choice of the foreign buyer, with the entire logistics cost to be borne by the buyer, the official added.
Payments will be made electronically in compliance with Foreign Exchange Management Act (Fema) rules. Buyers from Nepal can make payments in either Indian Rupees or US Dollars, while buyers from Bangladesh and Bhutan will be required to pay in US dollars, with valuation in Rupees.
“Opening Single Window Mode Agnostic (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,” said a senior company official.
CIL said the move follows consultations with prospective overseas coal consumers to assess demand and identify enabling clauses. The miner accounts for around 80 per cent of India’s total coal production.
The company’s share price at the Bombay Stock Exchange (BSE) closed at ₹427.90, up 6.88 per cent as compared to previous close.
New playbook
- Bangladesh, Nepal, Bhutan to participate
- Same floor price, premium for overseas bidders
- Rail-based evacuation on buyer’s choice
- No cap on purchase volumes for foreign buyers
- Overseas buyers to bear logistics cost
- Domestic coal offtake down 2.2% in FY26, so far