India to cut thermal coal imports, boost domestic coal consumption

Authorities aim to replace at least 20% of imported coal with domestic supply at most plants, with some able to lift the ratio to 30%, Reuters said. India mainly relies on coal for its electricity generation, even as it ramps up renewable energy at a record pace toward its 2070 net-zero goal, it noted.

The restriction on coal imports echoes the country's determination to reduce reliance on foreign supplies and achieve energy independence by 2047, as Mysteel Global has reported.

To meet this target, New Delhi had also been lifting domestic coal production through incentives over recent years. In 2025, India's coal output totalled 1,042.9 million tonnes, topping the 1,039.6 million tonnes for 2024 and setting a new record high, according to the Ministry of Coal. Thermal coal for power generation makes up the majority of India's output, Mysteel Global learns.

"Imports of lower and mid-calorific value coal are projected to decline gradually, offset by domestic supply, with imports limited to industries requiring specific qualities or higher-grade coal," said Vasudev Pamnani, an Indian coal trader interviewed by Reuters.

India is typically the world's second largest thermal coal importer following China. Reuters estimated that a 30% cut in its imports would be equivalent to around 15 million tonnes in volume, indicating that the country's thermal coal imports for the power sector totalled about 50 million tonnes in 2025.

As of December last year, imported thermal coal was used for around 91.3 gigawatts (GW) of power generation capacity in India, accounting for 40% of its total coal-related power capacity. Among the total, about 18.7 GW of capacity is designed specifically for imported coal, according to data from the Ministry of Power.

For full-year 2025, Indian coal-fired power plants generated 1,310.9 terawatt-hours of electricity, equal to about 85% of the country's total energy production, Mysteel Global calculated based on data from the ministry.

Written by Adrian Zhou, zhouwenhaoa@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com