Atmospheric methane is the second most important greenhouse gas after carbon dioxide and has significant impact on the atmosphere and climate. Continuous estimation and prediction of atmospheric CH 4 concentrations is important for understanding the associated global climate change. To constrain suitable spectral window and detector resolutions for satellite instruments, spectral simulations have been performed considering tropical atmospheric conditions. The study is focused on the 1.66 micron spectral region having CH 4 bands that are suitable for its detection and estimation. Both CH 4 concentration and spectral resolution are varied to identify optimum spectral resolution limit. The R branch peak at 1.6456 mm is found to be the most sensitive and suitable for CH 4 estimation. A concentration retrieval scheme is proposed and it is interpreted that the spectral resolution should not be worse than 0.2 nm.