Reliance plans 43,000 crore rupee underground coal gasification in Andhra Pradesh

what happened

Reliance Industries (RIL) has signed a memorandum of understanding with the Andhra Pradesh government under which it intends to invest an initial 43,000 crore rupees in an underground coal gasification project over the next two years, according to Moody's.

The total investment potential over the project's lifetime could reach 2.7 trillion rupees. The project will be developed on the Chintalapudi and Recherla coal blocks in Eluru district, which the company secured through an e-auction run by the Ministry of Coal. It could create around 5,000 direct and 35,000 indirect jobs.

The work will proceed in two phases. The first, with 3,000 crore rupees, will cover exploration, evaluation, pilot demonstration and feasibility assessment. The second involves commercial development and production and depends on completing the first phase and submitting a mining plan to the Ministry of Coal.

why it matters

For markets, this is mainly a signal of India's push to reduce reliance on imported fuels and chemical feedstock. Underground gasification turns coal into gas inside the seam without conventional extraction, and could complement the country's energy and chemicals sectors. Timelines and volumes remain indicative, and final decisions will depend on pilot results.

market impact

Coal and gas in India: a long-term project that could reshape the domestic fuel balance

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