Key Numbers
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Planned reduction in coal imports (power sector): ~30%
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India’s total coal imports (FY25 estimate): ~240–250 million tonnes
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Coal India production target (FY26): ~838 million tonnes
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Share of coal in India’s power generation: ~70%
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Major coal import sources: Indonesia, Australia, South Africa
Market Analysis
India is planning to significantly reduce coal imports for the power sector as part of a broader strategy to strengthen domestic coal production and improve energy security.
Government agencies and power utilities are reportedly working toward reducing coal imports by around 30%, particularly for power generation, by increasing the availability of domestic coal supplies.
India relies heavily on coal to meet its electricity demand, with the fuel accounting for roughly 70% of the country’s total power generation. While domestic coal production has been increasing steadily in recent years, imports have continued to play a role in meeting demand, especially during periods of high electricity consumption.
The country’s coal imports are estimated to be around 240–250 million tonnes annually, with a significant portion used by the power sector. Major suppliers include Indonesia, Australia, and South Africa.
To reduce dependence on imported coal, the government has been encouraging power plants to maximise the use of domestic coal supplies, while coal producers are expanding output through increased mining activity and operational improvements.
State-owned coal producer Coal India Limited has set an ambitious production target of approximately 838 million tonnes for FY26, reflecting efforts to increase domestic availability and reduce the need for imports.
In addition to production expansion, improvements in coal logistics, rail transportation, and mine productivity are also being pursued to ensure smoother supply to power plants.
Industry Impact
The push to reduce coal imports could have several implications for the energy and commodity markets.
For the power sector, higher reliance on domestic coal could improve supply stability and reduce exposure to international price volatility.
For global coal exporters, the policy could potentially affect export volumes to India, particularly for suppliers that have traditionally served the country’s power plants.
The move may also encourage greater investment in domestic mining capacity, transportation infrastructure, and coal supply chain efficiency.
At the same time, India’s energy demand continues to grow alongside industrial expansion and rising electricity consumption. As a result, domestic coal production will need to maintain strong growth momentum to support the country’s long-term energy requirements.
Market Pulse Insight
India’s plan to reduce coal imports reflects a broader trend toward strengthening domestic resource security in key energy commodities.
If domestic production targets are achieved and logistics constraints continue to improve, the country could gradually reduce its dependence on imported coal for power generation over the coming years.
However, imports may still play a role during peak demand periods or for specific coal grades required by certain power plants.