Reliance Proposes ₹2.73 Lakh Crore Investment in Andhra Pradesh for Major Coal Gasification Project
Andhra Pradesh News | August 20, 2026
Andhra Pradesh has attracted attention with a major proposed industrial investment by Reliance Industries Limited. The company has proposed an investment of around ₹2.73 lakh crore over 30 years to develop an integrated Underground Coal Gasification (UCG) complex in Eluru district.
The proposed project would use deep coal reserves from the Chintalapudi and Recherla coal blocks in Andhra Pradesh. The two blocks are estimated to contain around 3,130.61 million tonnes of coal, located at depths of more than 600 metres.
What is the Reliance project in Andhra Pradesh?
The proposed project will use Underground Coal Gasification technology, a process that converts coal underground into a combustible gas called syngas, instead of extracting the coal through conventional mining.
Syngas can be used as an industrial feedstock and can potentially support the production of products such as hydrogen, methanol, ammonia, urea and synthetic fuels.
₹2.73 Lakh Crore Investment in Three Phases
The proposed investment is planned in multiple stages.
The initial exploration and pilot phase is expected to involve investment of up to ₹3,000 crore, with work planned from the third quarter of 2026 through the fourth quarter of 2027.
A development phase is proposed for 2028–2030, with an estimated investment of around ₹1.20 lakh crore.
The production phase is planned from 2030 onwards, with a proposed investment of approximately ₹1.50 lakh crore.
Importantly, the large-scale investment remains a proposal and is subject to the results of exploration and commercial viability.
Employment Opportunities
The project could also create employment opportunities in the region. Estimates reported for the proposal indicate the potential for around 3,000–5,000 direct jobs and 20,000–35,000 indirect and induced livelihoods.
If implemented successfully, the project could create additional industrial activity in Eluru and surrounding areas.
Why the Project Is Important for Andhra Pradesh
Andhra Pradesh has been attracting major infrastructure and industrial investments in recent months.
The state has also seen significant railway investment. According to the Ministry of Railways, ₹10,134 crore has been allocated for railway infrastructure and safety works in Andhra Pradesh for 2026–27. The Centre has also reported 42 sanctioned railway projects covering 4,768 km in the state.
The proposed Reliance UCG project could add another major industrial development to this growth story.
What Happens Next?
The project will first depend on exploration and assessment of the coal reserves. The proposed pilot and exploration phase is expected to provide information about the technical and commercial feasibility of Underground Coal Gasification at the site.
If the exploration results are positive and the project receives the necessary approvals, development and production activities could follow in the later phases.
Andhra Pradesh Latest News
The proposed Reliance investment is one of the major industrial developments being discussed in Andhra Pradesh today. With a proposed investment of ₹2.73 lakh crore, the Eluru project could become an important development for the state's energy and industrial sector if it progresses as planned.
Note: The ₹2.73 lakh crore figure refers to the company's proposed long-term investment, not an amount already spent.
Source: Economic Times and current reports on the Reliance Industries proposal.

