Amid heightened global volatility and supply chain disruption due to war in West Asia, the Union Cabinet on Wednesday approved a series of proposals to boost India’s food and energy security, including higher minimum support prices (MSP) for key kharif crops and a coal gasification incentive scheme to reduce dependence on imported fuel.
Cabinet approved higher MSP for 14 kharif crops, including paddy and maize, for the 2026-27 marketing season with an outlay of ₹2.6 trillion.
It also cleared a ₹36,500 crore coal gasification scheme, semi-high speed double rail track connecting Sankhej to Dholera in Gujarat and upgradation of Nagpur International Airport. Together, these decisions mean a total expenditure of approx ₹3.18 trillion.
Kharif MSP
The increase in MSP has focused heavily on pulses and oilseeds as the government seeks to curb food inflation and reduce import dependence on edible oils and pulses.
The MSP for common paddy, the main kharif crop, was brought up ₹72 to ₹2,441 per quintal for the 2026-27 season, while Class A paddy MSP has been increased by the same amount to ₹2,461 per cent.
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Among pulses, MSP for tur (arhar) was increased by ₹450 to ₹8,450 per quintal, while the MSP office was increased by ₹400 to ₹8,200 per cent. Moong saw only a slight increase ₹12 to ₹8,780 per cent.
Among oilseeds and cotton, sunflower seed recorded the highest absolute increase ₹622 per cent, followed by cotton (medium and long staple). ₹557, nigerseed at ₹515 and sesame at ₹500. After the revision, the MSP of sunflower seed was fixed at ₹8,343 per quintal while MSP cotton was fixed at ₹8,267 for medium stapling and ₹8,667 for long base varieties. Nigerseed MSP has been promoted to ₹10,052 per quintal and sesame ₹10,346 per cent.
For other oilseeds, MSP soybean was grown by ₹380 to ₹5,708 per quintal while the groundnut MSP increased by ₹254 to ₹7,517 per cent.
The announcement comes ahead of the kharif sowing season, with forecasts pointing to above-normal summer temperatures and the possibility of a below-normal monsoon.
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Experts said sharper gains in sunflower, sesame and soybeans reflected concerns about India’s heavy reliance on edible oil imports, while higher support for MSMEs in pulses was aimed at sustaining acreage expansion and curbing domestic price volatility.
“A sustainable edible oil economy requires a balanced approach that protects farmers’ rewards while ensuring affordability to consumers. Supporting SMEs plays a vital role in boosting farmer confidence and promoting crop diversification towards oilseeds,” said Sudhakar Desai, president of the Indian Vegetable Oil Producers Association (IVPA), a trade body representing India’s edible oil and oilseeds value chain.
Coal gasification
The long-awaited coal gasification incentive program with spending of ₹37,500 crore, is aimed at setting up 25 gasification plants over the next three to four years to reduce dependence on imported liquefied natural gas (LNG). The scheme comes in addition to the ongoing one ₹Viability gap financing program in the amount of 8,500 million crowns.
Syngas produced by coal gasification would be used in fertilizer production and natural gas imports would be reduced. Under this scheme, financial incentives of up to 20% of the cost of equipment and machinery will be provided to beneficiaries selected through competitive bidding.
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“The system will support the gasification of approximately 75 million tonnes of coal/lignite and accelerate India’s 100 MT (million tonnes) coal gasification mission while reducing import dependence on LNG, fertilisers, methanol and other critical industrial inputs,” Union Coal Minister G, Kishan Reddy said in a post on X. “The mobilization is expected ₹An investment of ₹ 2.5 to ₹ 3 lakh crore and will create approximately 50,000 jobs, the initiative will also promote indigenous technologies and strengthen India’s domestic gasification ecosystem.
The move comes at a time when 20% of global gas supplies have almost stopped since the start of the US-Israeli war against Iran on February 28 and the subsequent blockade of the Strait of Hormuz.
“The success of this program will depend on execution discipline,” said Atanu Mukherjee, CEO of Dastur Energy, a Texas-based energy company. “The right gasification technology must match the right coal. Indian coal is high in ash and has very different properties to the coal used in many global gasification systems. Therefore, the choice of technology, coal chemistry, project scope, downstream integration, financing structure and carbon management will determine whether these projects become commercially bankable.”
