By Rishi Ranjan Kala

Copyright thehindubusinessline

The government has proposed the Coal Controller Organisation (COO) to regulate and register coal exchanges, including conducting market oversight and surveillance of their activities.

The proposal forms part of the Coal Ministry’s draft Coal Exchange Rules, 2025, for which it has invited comments from stakeholders by October 16, 2025.

The draft proposes that the coal exchange serves as a platform for buyers and sellers of coal and/or lignite, or their processed forms, to transact, trade, and enter into contracts online. Additionally, it suggests that the CCO will be the authority responsible for “register and regulate” these transactions.

The CCO will prepare detailed regulations for “Market oversight and surveillance over the activities of the Coal Exchange(s) to ensure compliance with applicable Laws and Rules and to check market integrity, namely, prevention of cartelisation, insider trading, circular trading, market manipulation and any other matter related thereto”, it has proposed.

Regulatory oversight

A coal exchange can operate only after it has been registered in accordance with the regulations notified by the CCO, the draft norms suggest.

Another proposal is that the CCO will make norms for the maintenance and preservation of accurate and complete books of accounts, transaction records, and other relevant information of the Coal Exchange(s).

“The CCO may also require the Coal Exchange(s) to preserve and provide access to additional information, such as audit trails, system logs, and any other data, as may be necessary to ensure compliance with regulatory requirements,” it added.

It will also be the responsibility of the regulator to notify guidelines and procedures for the creation of a Dispute Resolution and Grievance Redressal system for the activities related to the Coal Exchange(s) and other market participants.

“The fees and charges levied under the Regulations notified by the CCO under provisions of clause (b) of Rule 3 of these Rules shall be commensurate with requirements of the CCO,” the Ministry has proposed.

Provided that up to FY28, CCO’s fund requirement for carrying out its duties may be requisitioned by the regulator as part of its budget requirements presented to the Coal Ministry, it added.

“For subsequent years, such requirements shall be met from fees and charges collected. Provided further that the CCO shall maintain separate accounts for the income accrued and expenses incurred on account of Regulations issued by it,” it further explained.

Rationale for an exchange

The creation of an alternative market, away from the dominance of the state-controlled mining PSUs, is critical for a mature coal trading platform that is open, transparent and real-time.

The government aims to overhaul the decades-old production and supply structure with greater access to commercial mines through coal exchanges that will eventually offer the dry fuel on an on-demand basis to consuming industries, particularly MSMEs.

The exchange would can transform India’s old coal sales model from a ‘One-to-Many’ to ‘Many-to-Many’ model.

“With increased availability of domestic coal in the country, it is envisaged that there would be a paradigm shift towards a surplus coal scenario and resultantly the coal sales scenario is expected to undergo a major change from the existing mechanisms of coal sales channels, necessitating a major market reform backed by a Regulatory mechanism,” the Ministry emphasised while releasing the draft norms.

Therefore, in the scenario of increased availability of domestic coal in the country, further reforms are being carried out in the coal sector with a focus on promoting competitive markets for the sale of coal, and thus, the Ministry proposes to establish Coal Exchange(s).

Published on September 17, 2025