India has officially reversed a decade-old environmental mandate requiring coal-fired power plants to install Rs 2.5 lakh crore (USD 30 billion) worth of clean-air equipment aimed at reducing sulphur dioxide (SO2) emissions.

The relaxed policy marks a significant shift in India’s air quality and energy strategy. Initially, the government had directed coal plants to retrofit flue-gas desulphurisation (FGD) units to curb pollution. However, the updated regulations now ease these requirements for the majority of facilities, citing concerns over rising electricity demand, cost burdens, and grid stability. 

The environment ministry, in a gazette notification issued late on 11 July, 2025, exempted 79 percent of coal-fired power plants located beyond a 10-km (six-mile) radius of densely populated and polluted cities from complying with the 2015 emission control mandate. 

India generates over 70 percent of its electricity from coal, making it one of the world’s largest coal users. Industry officials have long argued that meeting the FGD retrofitting deadline would strain plant operators financially and lead to power shortages. Meanwhile, the government maintains the policy shift will ensure energy security while gradually transitioning to cleaner fuels without jeopardising economic growth.