For years, India’s energy policy rested on an implicit assumption that global commodity markets, despite periodic volatility, would remain broadly accessible, liquid and dependable enough to sustain the country’s growth ambitions. That assumption is now collapsing under the weight of successive geopolitical shocks. The Russia-Ukraine conflict had already exposed the fragility of fertiliser, crude and gas supply chains; the ongoing West Asia crisis has deepened those vulnerabilities further by threatening one of the world’s most critical hydrocarbon corridors, while simultaneously sending freight, insurance and energy costs sharply upward across Asia.

It is within this context that Prime Minister Narendra Modi’s recent appeal for fuel conservation and reduced dependence on imported products acquires a meaning far more structural than rhetorical. The government’s coal gasification push effectively converts that austerity messaging into industrial policy, seeking to transform India’s enormous domestic coal reserves into a strategic hedge against the country’s mounting exposure to imported LNG, methanol, ammonia, fertilisers and petrochemical feedstocks.

The numbers alone explain the urgency. India imports nearly 89 per cent of its crude oil requirement, over half its LNG demand, almost all of its ammonia requirement and roughly 80-90 per cent of methanol consumption, while continuing to rely on imports for nearly one-fifth of its urea needs. Collectively, India’s annual import burden for LNG, LPG, methanol, ammonia, coking coal, urea and associated chemical feedstocks has climbed to nearly ₹2.77 lakh crore, creating a strategic vulnerability that becomes particularly dangerous during periods of geopolitical disruption and currency instability. Coal gasification, in essence, is being projected as the industrial chemistry capable of partially rewriting that equation.

By converting coal into syngas — a synthetic mixture of hydrogen and carbon monoxide — India hopes to domestically manufacture products that currently drain billions of dollars from its foreign exchange reserves every year. Methanol, synthetic natural gas, ammonia, dimethyl ether, hydrogen and downstream petrochemical products could theoretically emerge from a domestic coal-to-chemicals ecosystem, reducing dependence on external suppliers whose reliability increasingly depends not on economics alone, but on wars, sanctions, shipping lanes and global strategic alignments.

What is striking, however, is not merely the technological ambition of the programme, but the ideological shift it represents. For decades, Indian economic policy oscillated uneasily between market liberalisation and strategic protectionism, often importing energy dependence along with growth. Today, however, policymakers appear increasingly convinced that supply-chain dependence itself has become a macroeconomic threat.

That thinking is now openly reflected in strategic assessments emerging from global institutions themselves. In its recent “India Forward” report, S&P Global argued that geopolitical instability is forcing India to rethink industrial policy around the concept of “strategic self-sufficiency,” describing self-reliance as the country’s “strategic insurance” against supply disruptions and external shocks. The report warned that the disruption in the Strait of Hormuz had already triggered one of the largest energy shocks in modern history, affecting nearly 16 per cent of global oil supply alongside major disruptions in LNG, LPG and fertiliser supply chains. Within that framework, energy available within national borders is increasingly being viewed not simply as an economic resource, but as a geopolitical stabiliser. This is precisely why coal gasification has moved from being a niche industrial discussion to a Cabinet-level strategic priority.

The attraction of the model lies partly in China’s experience. China currently operates nearly 350 million tonnes of coal gasification capacity — more than three times India’s entire 2030 target — and used that infrastructure during recent global disruptions as a domestic industrial buffer against LNG shortages, fertiliser shocks and petrochemical volatility. Indian policymakers increasingly view China’s coal-to-chemicals ecosystem not through the narrow prism of emissions, but through the broader lens of economic resilience and industrial sovereignty.

Industry executives, consultants and policy analysts are now articulating the same argument with unusual bluntness. Balasaheb Darade, founder of New Era Cleantech Solutions, has argued that without a large domestic coal gasification ecosystem, India cannot build long-term resilience against global energy shocks, while Kapil Bansal of EY-Parthenon has described coal gasification as a pathway toward “energy security, fertiliser resilience and industrial stability” in a world increasingly defined by volatile supply chains.

Similarly, Anish Mandal of Deloitte India has pointed out that India imported nearly 90 per cent of its methanol requirements and about a quarter of its urea needs because natural-gas-linked production economics remain unfavourable, arguing that coal gasification and liquefaction could become central to India’s import-substitution strategy across petrochemicals and fertilisers.

Yet the deeper paradox underlying India’s coal gasification ambition is impossible to ignore: the country is attempting to solve a twenty-first century energy-security crisis through a nineteenth-century fossil fuel resource, albeit using twenty-first century chemistry.

That contradiction sits at the heart of the debate. Supporters present coal gasification as a pragmatic transition technology capable of coexisting with renewable expansion while reducing import dependence during the long and uneven path toward net-zero emissions. Critics, however, argue that the programme risks locking India into another generation of carbon-intensive infrastructure precisely when renewable energy, battery storage and green hydrogen are becoming economically competitive.

The criticism is not entirely misplaced. Coal gasification may produce fewer particulate emissions than direct coal combustion, and its carbon streams are easier to capture through CCUS systems, but the process still generates substantial carbon dioxide emissions and remains fundamentally fossil-fuel dependent. Without large-scale carbon capture infrastructure — which itself remains commercially uncertain and expensive — the environmental economics of the programme remain deeply contested.

Then there is the engineering problem. Indian coal is among the most technically difficult feedstocks for gasification because of its extraordinarily high ash content, often ranging between 35 and 45 per cent, far above the levels for which most global gasification technologies were originally designed. High ash creates severe operational problems, including slagging, reactor choking and efficiency losses, forcing India either to indigenise gasification technology or spend heavily adapting foreign systems.

That explains why the government’s policy architecture now extends beyond subsidies alone. The Cabinet has simultaneously offered 30-year coal linkage assurances, encouraged indigenous technology development through entities such as Bharat Heavy Electricals Limited, and attempted to create long-term investment certainty for projects involving extraordinarily high capital expenditure and long gestation periods.

Even then, the economics remain risky. Coal gasification plants are among the most capital-intensive industrial assets in the energy sector, requiring massive investments before generating commercially viable output. Without guaranteed offtake mechanisms, tax concessions, concessional financing and integration with fertiliser and chemical procurement policies, many projects could struggle to achieve commercial viability despite government incentives.

Indeed, the central challenge confronting India is not announcing coal gasification targets, but executing them at a pace sufficient to matter. The country’s 2030 target of gasifying 100 million tonnes of coal would require industrial execution speed rarely seen in India’s infrastructure history, particularly in sectors involving environmental clearances, land acquisition, water availability, technological complexity and uncertain market economics.

Still, the government appears willing to absorb those risks because the alternative — continued dependence on volatile global fossil fuel and chemical markets — increasingly looks even more dangerous.

In that sense, India’s coal gasification strategy reveals something profound about the emerging global economic order. The age of hyper-efficient globalisation, where countries could safely outsource energy security to international markets, is giving way to an era where strategic redundancy, domestic production capacity and supply-chain resilience are once again becoming the defining metrics of national power.

The real question, therefore, is not whether coal gasification is perfectly clean, perfectly economical or perfectly aligned with climate orthodoxy. The question confronting Indian policymakers is whether a country aspiring to become a major industrial power can afford to remain critically dependent on external suppliers for the fuels, fertilisers and chemical feedstocks that underpin its economy. New Delhi’s answer, increasingly, appears to be no. (IPA Service)