Conversion of carbonaceous feedstock derived syngas into methanol is a lucrative option for the valorization of fossil resources in a cleaner and more efficient manner. India has the vast reserve of coal and it is considered important for the nation’s energy security. Coal remains the backbone of India’s energy sector, and has the one of the largest coal reserves. India’s “Methanol Economy” initiative by NITI Aayog, aims to mitigate reliance on imported crude oil vis-à-vis minimize greenhouse gas emissions by utilizing methanol. In this context, the present study investigates the integrated conversion of coal-derived syngas into methanol through a multi-step process comprising syngas generation via coal gasification, followed by gas cleaning, hydrogen enrichment via the water–gas shift (WGS) reaction, and selective CO2 removal by amine solvent based approach. The final simulated syngas composition utilized for catalytic conversion to methanol comprised of H2: 51%, CO: 21%, CH4: 2.5%, CO2: 4.5, and N2: 21% obtained after coal gasification, cleaning, H2 enrichment process by water gas shift (WGS) reaction and CO2 absorption. The catalysts employed for methanol synthesis were reduced in-situ using ultra-pure H2 to ensure high catalytic activity and selectivity. The reaction parameters for methanol synthesis have been carefully optimized, with the operating temperature maintained in the range of 200–240 °C and pressure between 40–60 bar. Under these conditions, the several catalytic reactions evaluated, and a maximum space–time yield (STY) of approximately 194.7 g L⁻1 catalyst h⁻1 was observed at 60 bar and 200 °C. These findings demonstrate the high potential of using coal-derived syngas for methanol production, contributing significantly to the effective utilization of domestic coal resources in alignment with national energy and environmental goals.