India will double its tax on coal to 200 rupees ($3.20) per tonne, Finance Minister Arun Jaitley said in his budget speech on Sunday.
The tax applies to domestically mined as well as imported coal.
“With regard to coal, there is a need to find a balance between taxing pollution, and the price of power. However, beginning this year, I intend to start on that journey too,” Jaitley said in his speech, according to local media.
India is the world’s third-biggest emitter of greenhouse gases in absolute terms, although it is well below the global average in per capita terms.
The tax announcement came as Prime Minister Narendra Modi’s government is stepping up domestic efforts to boost clean energy generation, having set a target of generating 175,000 MW from renewable energy in 2022.