A new bond: Coal in the energy sector in South Asia

Energy Demand in South Asia is expected to more than double by the year 2010, and the nature of the regions resource dependency is such that one country will cater to the needs of another. Clearly, an acceleration in exchanges and trade is predicted for the future. The energy sector is one of the most crucial areas for trade transactions, and it is therefore appropriate to consider the role of Indian coal in this sector in the future. So far, coal has a negligible presence in the options for the energy sector in the South Asian Association for Regional Cooperation (SAARC). This is possibly because of its official image as a dirty fuel in view of the high environmental and social costs of coal mining. However, a smooth transition from biomass fuels to higher forms will necessitate an increasing acknowledgement of the leading role that coal does and will play in the future energy scenario of SAARC countries which are, by and large, low income, dominantly rural economies. The Indian coal mining industry now finds itself at a propitious moment because of an awareness of new problems and opportunities offered by globalisation, and a bitter controversy over the relative merits and demerits of what has been variously seen as the magic of the market-place and the unmitigated disaster. Globlisation of capital thus sets the proper context for an understanding of the future options of the Indian coal mining industry. For SAARC countries, globalisation means how best to liberalise the existing protection policy, to invite foreign investments, and to restructure the existing organisation to permit an entry into and survival in the world market. For the Indian coal mining industry, globalisation acts as a starting point for understanding the possible future options.