The South Asian nation, the world’s second-largest importer of thermal coal after China, used nearly 50 million tonnes of imported coal in 2025 from suppliers including Indonesia, South Africa and Russia. Government and industry officials familiar with the plan said New Delhi aims to cut those imports by at least 15 million tonnes this year.
Coal remains central to India’s energy mix, accounting for roughly three-quarters of electricity generation, even as the country accelerates renewable energy deployment in pursuit of its 2070 net-zero emissions target. A key focus of the new plan is the country’s nearly 17 gigawatts of power plants originally designed to run on imported coal.
Authorities are asking plants to test higher blending ratios of domestic coal, with the goal of replacing at least 20 per cent of imported coal at most facilities. Some plants could increase substitution levels to as much as 30 per cent, according to officials and power company sources.
The push comes as state-backed miner Coal India and private producers ramp up local output. Coal India reported record production of 781.1 million tonnes in the fiscal year ending March 2025, accounting for nearly 80 per cent of the country’s total coal output. As of December 31, the company was holding inventories of around 90 million tonnes. To manage stockpiles, it has opened exports to Bangladesh, Bhutan and Sri Lanka.
India’s thermal coal imports fell 6.2 per cent in 2025 — the steepest decline since 2021 — as milder weather reduced electricity demand.
However, efforts to cut imports have historically faced technical obstacles. Many power plants were engineered to burn higher-calorific imported coal and struggle to efficiently use lower-grade domestic supplies. An executive at a power plant in western Gujarat state noted that substantially increasing domestic coal usage would require costly boiler recalibration and potentially government subsidies.
Officials involved in the testing process said the government has assured producers that domestic coal supplies will meet higher quality standards to facilitate blending.
Despite plans to expand coal-fired power capacity by 97 gigawatts to reach 307 gigawatts by 2034–2035, analysts expect thermal coal imports to slow gradually. Rajiv Ramnarayan, chief executive of Singapore-based coal trader Equentia Natural Resources, said newer plants are likely to be located closer to domestic coal sources, reducing the need for imports.
Meanwhile, the share of imported thermal coal is expected to shift increasingly toward non-power sectors such as cement and sponge iron production. According to Vasudev Pamnani, director at iEnergy Natural Resources, imports of lower and mid-calorific coal are projected to decline gradually as domestic supply fills the gap, with overseas purchases limited to industries requiring specific qualities or higher-grade coal.
The coal and power ministries did not respond to requests for comment.
India’s strategy reflects a balancing act between maintaining energy security, managing domestic coal surpluses, and advancing long-term climate commitments while keeping electricity supply stable in one of the world’s fastest-growing major economies.