NSE Secures SEBI Approval to Invest in India’s First Physical Coal Exchange

The National Stock Exchange of India Limited (NSE) has received approval from the Securities and Exchange Board of India (SEBI) under Regulation 38(2) of the SECC Regulations, 2018, to invest in the proposed National Coal Exchange of India Limited. This approval marks a key regulatory milestone towards the establishment of a structured market platform for physical coal trading in India.

Company will soon apply to Coal Controller Organization to secure license for setting up Coal Exchange under relevant regulatory provisions.

The proposed exchange is intended to facilitate electronic spot trading of coal through standardized contracts, enabling transparent price discovery and defined settlement mechanisms for market participants including producers, consumers and traders. The initiative is aligned with the Government of India’s coal sector reforms, including commercial mining and liberalised coal sales, and is expected to support the development of a formal, transparent and efficient market structure for coal transactions, subject to incorporation of the entity and receipt of applicable approvals.

History of Formation of Coal Exchange in India

India’s coal exchange is still in the formative stage — it has not yet been launched, but its roots lie in decades of coal sector reforms, beginning with nationalization in the 1970s, liberalization in the 1990s, and recent government initiatives to create a transparent, structured market for physical coal trading.

Background: Coal Sector Evolution in India

• Pre‑Independence & Early Years: Fragmented private ownership and limited regulation.
• 1950s Planning: Creation of National Coal Development Corporation (NCDC) in 1956.
• 1970s Nationalization: Consolidation under Coal India Limited (CIL) in 1975.

Liberalization & Reform Era

• 1990s–2000s: Captive mining allowed for industries like power and steel.
• 2014 onwards: Commercial coal mining introduced; auctioning of coal blocks.
• 2020s Reforms: Liberalized coal sales and digital governance initiatives.

Formation of the National Coal Exchange

• Regulatory Push: SEBI approved NSE’s investment in the proposed National Coal Exchange of India Limited.
• Next Steps: Application to Coal Controller Organization for license.
• Purpose: Electronic spot trading of coal via standardized contracts.
• Alignment: Supports India’s coal sector reforms and transparent market structure.

The coal exchange is not yet operational but represents the culmination of decades of restructuring — from nationalization to liberalization — now moving toward a market‑driven, transparent trading platform.

About National Stock Exchange of India Limited (NSE):

National Stock Exchange of India (NSE) was the first exchange in India to implement electronic or screen-based trading. It began operations in 1994 and is ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on SEBI data. NSE has a fully integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions and financial education offerings. NSE also oversees compliance by trading, clearing members and listed companies with the rules and regulations of SEBI and the exchange. NSE is a pioneer in technology and ensures the reliability and performance of its systems through a culture of innovation and investment in technology. NSE is the world’s largest derivatives exchange by trading volume (contracts) for calendar year 2025 as per the statistics maintained by Futures Industry Association (FIA). NSE is ranked third in the world in equity segment by number of trades (electronic order book) in 2025, as per the statistics maintained by World Federation of Exchanges (WFE).