India has abundant coal resources, but weaker production and pressure on power-plant inventories expose a gap between coal underground and reliable fuel availability.

Production has lost momentum

India’s coal story has entered a more challenging phase. After several years of rising production, output declined in 2025–26, and the latest figures show that weakness continuing into the current financial year.

Coal production increased from 893.19 million tonnes (MT) in 2022–23 to 997.83 MT in 2023–24 and 1,047.52 MT in 2024–25. It then slipped to 1,040.08 MT in 2025–26, a decline of 0.73%.

The Ministry of Commerce and Industry’s Index of Eight Core Industries, released on September 21, 2026, recorded a 3.8% year-on-year contraction in coal production in August. Although the index recovered in June and July after sharp falls in April and May, it declined 3.2% cumulatively during April–August compared with the same period a year earlier.

The index measures production performance, not the quantity delivered to individual consumers. Nevertheless, following the full-year decline in 2025–26, the latest figures indicate that production momentum has not yet been restored.

This does not mean that India is running out of coal. It means that production and delivery need closer attention when electricity demand is placing pressure on the supply system.

Ownership is not the whole explanation

Producer-level figures suggest that the problem cannot simply be attributed to privatization.

Coal India Limited (CIL) produced about 768.19 MT in 2025–26, down from 781.06 MT in the previous year. Singareni Collieries Company Limited also recorded a decline. By contrast, captive, commercial and other producers increased output to about 213.89 MT from 197.46 MT.

Private and captive mining have added supply, but their expansion has not fully offset weakness among traditional producers. Ownership alone does not determine performance. Mine development, investment, equipment, clearances, transport connections and operational efficiency all matter.

Nor does ownership of overseas coal assets by Indian companies prove that they deliberately encourage imports to benefit their foreign operations. That claim would require evidence about procurement contracts, prices, coal quality and commercial decisions. The appropriate response is greater transparency and competitive procurement, not conclusions unsupported by evidence.

The missing link: reliable delivery

Coal security depends on more than how much is extracted from mines. Coal must also be loaded, transported and delivered to power plants and industrial users when required. Inadequate first-mile connections, loading facilities, rail capacity and coordination can delay deliveries. Heavy rainfall can disrupt mining and transport, although weather alone cannot explain all production weakness.

The Ministry of Coal’s official October 9, 2026, release reported that daily supplies to the power sector had risen by around 36% from September’s low. October supplies were averaging about 9% above September levels, while the daily rate of stock depletion had fallen by more than half, from 0.243 MT in September to 0.116 MT in October.

The improvement is significant, but the ministry said that stock rebuilding had yet to commence at that stage. More coal arriving and inventories falling more slowly are encouraging signs; neither automatically means that stocks have returned to adequate levels.

What the official inventory figures tell us

The Ministry of Coal’s official Press Information Bureau release of October 12 provides a more precise picture of coal stocks at domestic coal-based power plants.

The aggregate stock held at these power plants stood at 18.932 MT on September 29 and 18.205 MT on October 10. These figures refer to power-plant stocks, not India’s total coal inventory across mines, transit and other locations.

According to the ministry, power-plant stocks fell by about 7.28 MT during September, averaging roughly 0.24 MT per day. During the first ten days of October, the decline slowed to about 0.56 MT in total, or approximately 0.06 MT per day. Stocks increased by 0.024 MT on October 2 and by 0.017 MT on October 10.

Average daily coal supply to the power sector increased from 2.21 MT in September to 2.49 MT during October 1–10. Average daily rail loading rose from 426 rakes in September to 469 rakes in the first ten days of October.

The conclusion is clear: deliveries improved substantially and inventory depletion slowed, but power-plant stocks on October 10 were still below their September 29 level. The evidence points to stabilization, not yet to a sustained recovery in inventories.

The ministry has also clarified that a “critical stock” classification indicates that a plant has fallen below its prescribed inventory threshold. It is an early-warning measure, not proof that the plant has run out of coal or faces imminent shutdown. The priority is to direct supplies to vulnerable plants and sustain deliveries long enough to rebuild appropriate buffers.

Imports remain necessary—but can be costly

India imports coal because domestic supplies do not fully meet every consumer’s requirements. This is particularly important for coking coal used in steelmaking. Some coastal power plants are designed to use imported coal, while other users import coal for blending or because of commercial and logistical considerations.

The Ministry of Coal’s annual statistics show that total coal imports rose from 237.67 MT in 2022–23 to 264.53 MT in 2023–24. They subsequently declined to about 243.63 MT in 2024–25 before increasing to 246.37 MT in 2025–26.

Imports are not inherently undesirable. They can be justified when a required grade is unavailable domestically or when plant design and location make imported supplies practical. But imports triggered by avoidable domestic production or transport failures can increase costs, foreign-exchange requirements and exposure to international price volatility.

India should therefore seek to reduce avoidable import dependence, not eliminate imports regardless of quality or cost. Thermal coal and coking coal must also be assessed separately because they serve different purposes and have different supply constraints.

Five priorities for dependable supply

India needs a coordinated coal-security strategy built around five priorities.

First, restore production momentum. Identify the causes of falling output mine by mine and producer by producer. Production targets must be supported by realistic plans for equipment, investment, clearances and operations.

Second, improve evacuation. Rail links, first-mile connectivity, loading facilities and transport capacity must expand alongside mining. Producing coal is not enough if it cannot reach the consumer on time.

Third, rebuild appropriate inventories. Power plants need buffers suited to their consumption, location, transport reliability and seasonal risks. Supply must exceed consumption for long enough to restore stocks, not merely slow their depletion.

Fourth, improve coal quality. Better grade control, washing and beneficiation where economically justified, and appropriate blending can improve the suitability and efficiency of coal use. Coking coal requires a separate strategy.

Fifth, strengthen procurement transparency. Official reporting should distinguish thermal and coking coal imports and explain changes in production, dispatches and imports. Procurement should be based on verifiable requirements, competitive pricing, quality and logistics.

From resources to coal security

India’s coal challenge is not simply a contest between public and private ownership, or between domestic mining and imports. It is a question of whether production, transport, inventories and electricity demand are managed as parts of one system.

Coal-fired generation remains central to electricity supply even as renewable energy expands. Unreliable coal availability can raise costs, complicate industrial operations and increase pressure on the import bill. Better forecasting, stronger logistics and dependable production can reduce these risks.

India has abundant coal resources. The test is whether it can deliver the right quantity and quality to the right place, at the right time and at a competitive cost. That is the difference between having coal underground and achieving genuine coal security.

Official data referenced: Ministry of Commerce and Industry, Index of Eight Core Industries, September 21, 2026; Ministry of Coal, PIB releases of October 9 and October 12, 2026; Ministry of Coal, Monthly Statistics at a Glance.