The approval, granted under Regulation 38(2) of the SECC Regulations, 2018, marks a key regulatory milestone towards the establishment of a structured market platform for physical coal trading in India.

The move follows NSE's board approval in February to set up a wholly owned subsidiary for the initiative, with a proposed initial capital infusion of up to Rs 100 crore.

NSE plans to hold a 60 per cent stake in the venture, while the remaining 40 per cent will be offered to other shareholders.

The exchange will now apply to the Coal Controller Organisation to secure the necessary licence for establishing the coal exchange under relevant regulatory provisions.

The proposed exchange is intended to facilitate electronic spot trading of coal through standardised contracts, enabling transparent price discovery and defined settlement mechanisms for market participants including producers, consumers and traders.

The initiative aims to address long-standing inefficiencies in India's coal trading system, which has historically operated through fragmented channels.

Earlier this week, the NSE received approval from the Ministry of Corporate Affairs for reservation of the name 'National Coal Exchange of India Limited'.

For NSE, the venture represents a strategic expansion beyond its traditional equity and derivatives markets into the physical commodities sector.

The decision marks a decisive shift towards institutionalising coal trade through a transparent and technology-driven marketplace, long considered a missing piece in India's commodities ecosystem.

The development comes as India continues to strengthen its domestic coal production, having crossed the one billion tonnes mark in March for the second consecutive year.

The proposed exchange could transform how coal is traded in one of the world's largest coal-consuming nations, potentially setting a precedent for similar reforms across other physical commodities.

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