Abstract

As we stand today, at the threshold of a Global Market, there are many challenges facing the Indian Coal Industry. Since the beginning of this decade, dramatic political and economic changes are taking place in India. The economic reforms initiated by the Govt. in 1991 mark a watershed in India’s economic thinking and aim at lowering protectionism and integrating the country’s economy with global market. Barriers to import and foreign capital are being lowered. Changes in industrial, foreign trade, exchange rate, and tax policies have led to a paradigm shift towards market forces and competition. The old paradigm that dictated success is being replaced by new rules.The emerging business scenario indicates that there is an urgent need for the Indian coal industry to become proactive, improve its overall performance and understanding of market and customers need. There has to be an increase in the awareness and concern, efficiency improvement and increasing productivity and profitability. Coal India, which produces 90% of coal production of India, has to develop a marketing strategy, which uses its own competitive advantages to meet the challenges of growing competition from imported coal and the new entrants in the Indian coal market. With around 60% of the primary energy needs being met by coal and with large reserves available in the country compared to other fossil fuel, the role of coal in the country’s economy will continue to be vital. The liberal economic policies are encouraging the rapid expansion of industry in India, which in turn is creating unprecedented demand for coal to fuel power stations, steel plants, cement and various other industries. Given the above scenario some of the considerations for the long-term strategic objectives for the coal industry has to be to become the cost leader in terms of being the lowest cost provider of a given value and to increase production to meet the challenges of widening gap between demand and indigenous coal availability. It should be noted that liberalisation is removing most of the regulatory entry barriers for competition and hence there is a strong need for superior positioning in terms of efficiency by utilizing the best available technology and equipment.

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