Tax Overhaul Boosts Coal India’s Push to Replace Pricey Imports

The Indian government's decision to revise the consumption tax structure has presented a timely opportunity for Coal India Ltd., the state-owned mining company, to address its challenges. Coal India has been grappling with plateauing domestic demand and an accumulation of inventory. The tax overhaul, which includes a reduction in the goods and services tax (GST) on coal, is expected to make domestic coal more price-competitive compared to imported coal. This could help Coal India increase its market share and reduce its reliance on pricier imports. The company plans to leverage this tax advantage to push for greater coal substitution, particularly in the power sector, which is the largest consumer of coal in India. By making domestic coal more affordable, Coal India aims to capture a larger share of the market and alleviate the issues of declining demand and bloated inventories it has been facing. The move is seen as a strategic step to bolster Coal India's position in the Indian energy landscape and strengthen its role in meeting the country's growing energy needs.