New regulatory framework aims to ensure fair price discovery, strengthen market oversight and enable online trading for producers and consumers
TFP Bureau, New Delhi, July 29, 2026: The Ministry of Coal has notified the Coal Exchange Rules, 2026, establishing a comprehensive regulatory framework for transparent, efficient and competitive trading of coal, lignite and their processed forms. Notified under Section 18B of the Mines and Minerals (Development and Regulation) Act, 1957, the new rules are expected to modernize India’s coal trading ecosystem and improve market efficiency.
Under the new framework, the Coal Controller Organisation (CCO) has been designated as the regulatory authority responsible for registering, regulating, renewing and, where necessary, revoking the registration of Coal Exchanges. The authority will also approve exchange operations, bidding mechanisms, contract specifications and price discovery processes, while issuing operational guidelines in consultation with the Central Government.
A Coal Exchange has been defined as an online platform where buyers and sellers can trade coal and its processed products through delivery-based contracts. The exchanges will facilitate transparent transactions, ensure efficient price discovery and support timely supply of coal through electronic trading systems.
The rules also provide strong regulatory safeguards to maintain market integrity. The Coal Controller Organisation will oversee market operations to prevent cartelization, insider trading, market manipulation and abuse of dominant position. It has also been empowered to conduct inspections, issue interim orders and intervene in cases of non-compliance.
To ensure secure transactions, every Coal Exchange will maintain a Settlement Guarantee Fund (SGF), managed by an independent committee, with at least 50 percent of the fund invested in secure and liquid instruments such as fixed deposits with public sector banks, treasury bills and government securities.
The exchanges will also establish dedicated market surveillance departments, grievance redressal forums and automated audit systems. Provisions for information technology security audits, disaster recovery sites and alternate trading facilities have been included to ensure uninterrupted operations and business continuity.
The Ministry said the regulated Coal Exchange is expected to become operational within 12 months from the receipt of an application for registration. The dedicated online application platform for setting up Coal Exchanges was launched on July 15, 2026.
The new framework will allow commercial and captive coal miners, public sector coal companies and consumers, including small and medium enterprises in the non-regulated sector, to participate in online coal trading. Prices will be determined through a competitive bidding process approved by the regulator and adjusted based on certified coal quality, ensuring fair and transparent transactions.
The information was shared by Union Minister of State for Coal and Mines Shri Satish Chandra Dubey in a written reply in the Lok Sabha on Wednesday.
