Coal India Allows Direct Bidding by Buyers in Bangladesh, Bhutan and Nepal

Coal India Limited has opened its online coal auctions to buyers from Bangladesh, Bhutan and Nepal from January 1, 2026.

This is the first time foreign buyers can take part directly in Coal India’s Single Window Mode Agnostic (SWMA) e-auction platform. Earlier, these countries could access Indian coal only through domestic traders.

The move comes at a time when India is seeing soft demand growth from the power sector and wants better use of surplus coal.

Key Takeaways

• Foreign buyers from Bangladesh, Bhutan and Nepal can now bid directly in SWMA auctions
• Payments must follow FEMA rules with USD payments allowed
• Coal India shares jumped about 6 to 7 percent after the news
• Direct participation removes middlemen and increases transparency
• Move aims to raise competition and improve coal offtake

Also Read: Must Know Trading and Investment Rules for Future Millionaires in India

Coal India said the decision reflects a calibrated approach. Domestic supply requirements remain protected, but cross border trade becomes simpler and more transparent. The SWMA system began in 2022.

It replaced older auction formats so that coal buying became easier and more market driven. Now the same window will also serve select international buyers in the region.

A one time registration system will allow foreign companies to join the bidding platform. Participation will take place through digital bidding tools. Successful bidders will make advance electronic payments. Exports will move through notified logistics channels.

All steps follow Foreign Exchange Management Act rules. Buyers from Nepal may pay in INR or USD. Buyers from Bangladesh and Bhutan must pay in USD with value assessed in rupees.

Coal India engaged with overseas consumers before finalising the policy shift. The idea was to understand demand needs and required process changes. This helped frame the updated auction scheme.

Market reaction and business outlook

Coal India shares rose sharply after the announcement. The stock touched a 52 week high of about ₹429 and gained around 6 to 7 percent intraday. Analysts see the move as positive for margins and auction premiums. Domestic coal demand growth has slowed. Power generation from renewable energy has also increased. This has affected earlier auction premium levels and offtake.

India exported about 1.54 million tonnes of coal in the year up to November 2025. Most of this went to Bangladesh, Nepal and Bhutan. These flows used trader intermediaries. Direct participation will likely replace that channel, not create major new demand. Even then, better pricing transparency and competition may help Coal India improve realisations on surplus volumes.

Analysts also point out that inland logistics and port handling add cost. This sometimes makes Indian coal less competitive against Indonesian suppliers for Bangladesh. Still, regional buyers may value predictable supply and auction clarity.

Transparency and regional energy trade

Coal India has framed the move as part of a market expansion strategy that does not reduce priority for domestic supply. The company says the revised system improves transparency and supports fair competition. It also strengthens regional trade ties.

Public conversations online have been mostly neutral to positive. Market watchers highlighted the stock performance. Business analysts described the decision as a step that boosts India’s energy footprint in the region. Some users referred to the development as a push toward “coal diplomacy”. Many posts welcomed the simpler procurement structure for neighbouring countries.

Investors also liked the export diversification angle. The move could help stabilise margins in a year when domestic demand growth has been softer. For Coal India, higher auction participation may support better price discovery.

Domestic demand context

India has seen lower coal based power generation in several recent months. Renewable energy supply has expanded. This has led to reduced coal lifting by some consumers. Coal India reported periods of lower offtake even as production grew. In December 2025 the company produced about 75.7 million tonnes, higher than a year earlier. However, offtake during the month was around 64.9 million tonnes, which was lower than December of the previous year.

This backdrop explains the export policy shift. The government earlier approved surplus coal exports from power plants as well. Cross border sales help balance supply during periods of muted domestic pull.

Payment security and compliance

Coal India highlighted that all payments will follow FEMA norms. Exchange transparency and banking compliance remain key. The company has added detailed procedural checks into the auction framework. This includes bidding rules, delivery processes and settlement monitoring.

A company official said the change shows a careful approach. Domestic buyers still receive priority supply, but Coal India can now place surplus resources in wider markets. The updated scheme keeps the process structured and predictable for both sides.

Stock market interest

Coal India’s market capitalisation crossed ₹2.6 lakh crore after the share rally. The stock has gained over 12 percent in the past month and has delivered steady returns over longer periods. The announcement added further momentum as investors expect stronger auction performance.

The company had earlier reported a decline in consolidated net profit in the second quarter of FY26 to ₹4,354 crore. Revenue from operations also fell slightly year on year. The latest policy change may support better realisations across the auction channel going forward.

Summary – Why This Move Matters

1. Direct access replaces intermediaries
2. Transparency improves auction price discovery
3. Regional trade ties become stronger
4. Coal India gains export flexibility during surplus periods
5. Investors see revenue support and improved margins

This development marks a notable shift in India’s coal trade posture. It strengthens regional energy linkages with Nepal, Bhutan and Bangladesh, while keeping domestic supply secure.

With structured compliance and digital bidding, Coal India positions itself as a more open yet controlled supplier in South Asia. The market response signals confidence that the move can help manage surplus coal and support earnings in a changing power landscape.

Tags: Coal India, Coal exports India, SWMA auction, Bangladesh coal imports, Nepal coal trade, Bhutan coal buyers, Energy market India

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