Prelims level : Economics Mains level : GS-III- Effects of liberalization on the economy, changes in Industrial Policy and their effects on Industrial Growth.
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Why in News?

  • The Centre’s recently announced 100% foreign direct investment (FDI) in the coal sector.


  • India is one of the largest importers of thermal coal. Government allowing 100% FDI in coal mining will attract global miners. This will result in FDI inflow along with updated technology, and increase India’s coal production.
  • It is believed that the Centre’s announcement allowing 100% foreign direct investment (FDI) in the coal sector should enhance Coal India Limited’s (CIL) competitiveness and efficiency.
  • 100% FDI in mining is believed to send a positive signal to global investors and give a significant push to the economy.
  • Increased mining will also lower “avoidable imports of coal that India has to make due to the prevalent demand-supply gap.


  • It is opined that the government has taken a slew of measures, but more needs to be done.
  • The FDIs look for large mines and a simplified single-window for mining leases and environmental and forest clearances.
  • While the announcement would kindle the interest of global miners, they would need increased ease-of-doing business and time-bound approvals before they invest here.
  • In India, it takes at least six years from getting a mine allocation to actually starting mining operations.This has now been fixed at 66 months. The Coal Ministry is taking steps such as doing away with the need for prior approval before a State government hands over the mining lease, which typically takes 6-12 months.
  • Overseas investors usually do not view such long timelines favourably.
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