Talk of an India coal imports surge in 2026 needs an immediate caveat: it is India’s power demand and coal-fired generation that are surging to record levels this year, not overseas coal purchases. A weak southwest monsoon, prolonged heatwaves and record electricity peak demand have pushed coal-fired generation toward all-time highs through July 2026, even as the country’s full-year thermal coal imports for the power sector actually fell by 27.4 percent in FY2025-26. That contradiction — booming demand alongside falling imports — is the real story, and it says as much about the strength of India’s domestic coal supply chain as it does about the state of global coal prices.
Record Power Demand Meets Cautious Import Behaviour
India’s peak power demand hit a record 270.82 gigawatts on 21 May 2026, driven by an early and intense heatwave, and coal-fired generation has stayed elevated through the summer as a subdued monsoon reduced the usual seasonal relief on cooling demand. Coal-based plants, with a combined capacity of about 230.8 GW, supplied nearly 70 percent of the electricity generated between April and June 2026, according to the Ministry of Power’s submission to the Rajya Sabha. Coal-fired generation over 1-25 July reached 92.6 terawatt-hours, up 12 percent from the same period a year earlier, putting the month on track for an all-time high if the weak monsoon persists. Yet this surge in generation has not translated into a matching surge in seaborne coal purchases — quite the opposite, for most of the year.
The FY26 Number: Imports Actually Fell 27 Percent
According to the Ministry of Coal, thermal power plants imported 45.4 million tonnes (MT) of coal in FY2025-26, down 27.4 percent from 62.5 MT in FY2024-25. The decline has continued into FY2026-27: coal imports for blending and use by power plants fell nearly 25 percent year-on-year in April 2026 alone, and shipbroker data cited by trade publications showed thermal coal imports down roughly 15 percent year-on-year across January-June 2026, to about 74.5 million tonnes. Coal imports as a share of total coal consumption also fell, from 21.69 percent in April 2025 to 19.68 percent in April 2026 — a meaningful shift toward domestic self-reliance in a sector that has historically leaned on imported coal, particularly at power plants specifically designed to run on it.
| Metric | FY2024-25 | FY2025-26 | Change |
|---|---|---|---|
| Total power-sector coal imports | 62.5 MT | 45.4 MT | -27.4% |
| Imports by plants designed for imported coal (April) | 3.97 MT | 2.88 MT | -27.45% |
| Total coal imports (April) | 24.27 MT | 21.13 MT | -12.95% |
| Imports as % of total coal consumption (April) | 21.69% | 19.68% | -2.0 pts |
| Coking coal imports (April, steel sector) | 5.93 MT | 6.01 MT | +1.34% |
Why Imports Didn’t Surge Despite Demand
Two forces explain why India chose to lean on domestic coal rather than ramp up imports even as demand hit records. On the supply side, a series of government policy interventions expanded the pool of domestically available coal for power plants. The Annual Contracted Quantity (ACQ) — the guaranteed volume of domestic coal supplied under linkage agreements — was raised to 100 percent of the normative requirement for plants where it had previously been cut to 90 percent (non-coastal) or 70 percent (coastal) of requirement. The Revised SHAKTI Policy, 2025, allowed even Imported Coal-Based (ICB) plants, which are designed to run on overseas coal, to access domestic coal allocations for the first time, directly reducing their import dependency. A new CoalSETU auction window also expanded the availability of washed coal for the non-regulated sector. On the price side, global thermal coal benchmarks — including the Newcastle 6,000 kcal/kg index, which touched a four-week high near $132.76 a tonne in late July 2026 — made imports comparatively expensive against regulated domestic tariffs, discouraging Indian utilities from importing more even as domestic stockpiles thinned.
- Higher ACQ allocations: Domestic coal linkage quantities raised to 100% of normative requirement for previously short-changed plants.
- Revised SHAKTI Policy, 2025: Opened domestic coal access to plants originally designed to run on imported coal.
- CoalSETU auctions: Expanded availability of washed coal for non-regulated buyers.
- Elevated global prices: Newcastle and Indonesian coal benchmarks rose through mid-2026, making imports less attractive relative to domestic tariffs.
- Removal of GST compensation cess on coal: Improved the price competitiveness of domestic coal versus imported fuel.
The Mid-2026 Wrinkle: A Cautious Rebound
The picture is not entirely one-directional. Weekly trade data tracked by industry monitors showed India’s coal imports recovering to about 4.20 million tonnes in the week of 12-18 July 2026, up from 3.83 million tonnes the previous week, as both power utilities and steelmakers stepped up overseas procurement, with steam coal imports rising to 2.41 MT and coking coal climbing sharply to 1.78 MT. Even so, Reuters-cited trade projections for full-month July 2026 pointed to seaborne thermal coal arrivals of only around 10.88 million tonnes — an 11-month low and a decline from 12.3 million tonnes in June — as Indian buyers continued to resist high global prices even with domestic power-plant coal stocks tightening to roughly 13-14 days of cover, below the more comfortable levels utilities typically prefer heading into peak demand months.
Coking Coal: The Exception to Watch
While thermal coal imports for power generation have fallen, coking coal imports for the steel industry have shown more resilience, edging up 1.34 percent year-on-year in April 2026 and climbing further in mid-July trade data. This reflects a structural reality rather than a demand shock: India has limited domestic reserves of high-quality coking coal suitable for steelmaking, so growth in steel production translates fairly directly into higher coking coal imports regardless of what is happening in the power sector’s thermal coal market. Analysts have been careful to separate the two coal markets in their commentary, since conflating “coal imports” broadly with “power-sector thermal coal imports” specifically can create a misleading picture of either surging or collapsing demand.
Stock Levels: How Tight Is Too Tight
As of 12 July 2026, the Ministry of Power reported 42.8 million tonnes of coal stock at thermal power plants nationwide, enough for roughly 14 days of operation at 85 percent plant load factor. The government has described this as adequate, backed by daily monitoring through an inter-ministerial committee involving the Ministry of Power, Ministry of Coal and the Railways, with priority given to coal-carrying freight rakes. However, trade sources have suggested that a formal government directive pushing utilities to import more coal would likely only be triggered if combined power-plant stocks fell below roughly 30 million tonnes nationally — a threshold not yet reached, but one worth watching if the monsoon remains weak through August.
Limitations of This Data
- Full-year FY2026-27 import figures were not yet available as of this writing; monthly and weekly figures cited here are the most current available estimates from government and trade sources.
- Trade estimates for July 2026 arrivals (around 10.88 MT) are projections from shipping and commodity data providers (e.g., Kpler, DBX), not final customs-cleared totals, and are subject to revision.
- “Coal imports” figures vary by source depending on whether they cover thermal coal only, coking coal only, or total coal across all end uses; care should be taken when comparing numbers across reports.
- Global coal price benchmarks are volatile and can shift the import-versus-domestic calculus within weeks.
Frequently Asked Questions
Are India’s coal imports actually rising or falling in 2026?
For most of FY2025-26 and the first half of calendar 2026, power-sector thermal coal imports fell sharply — by 27.4% for the full fiscal year — even as power demand and coal-fired generation hit record highs. There was a short-term weekly rebound in mid-July 2026, but full-month projections still pointed to an 11-month low in seaborne thermal coal arrivals.
Why is India relying more on domestic coal?
Government policy changes, including a higher Annual Contracted Quantity for domestic coal linkages and the Revised SHAKTI Policy, 2025, expanded domestic coal availability even for plants designed to run on imported coal. Elevated global coal prices have simultaneously made imports less economical.
Is India at risk of a coal shortage in 2026?
As of mid-July 2026, the Ministry of Power reported adequate stocks of 42.8 million tonnes at thermal plants, sufficient for about 14 days of operation. This is being actively monitored, and officials have said supply is being prioritised through daily coordination between the Coal Ministry, Power Ministry and Railways.
Why are coking coal imports rising while thermal coal imports fall?
Coking coal, used in steelmaking, has limited domestic substitutes in India due to the quality of local reserves, so steel production growth tends to directly increase coking coal imports. Thermal coal used for power generation has far more domestic substitution available, which is why its import trend has moved in the opposite direction.
Bottom Line
The narrative of an India coal imports surge in 2026 is only half right: power demand, coal-fired generation and, briefly, weekly import volumes have all surged, but the bigger annual trend has been a steady decline in overseas coal purchases as India leans harder on expanded domestic supply and shrugs off elevated global prices. Whether that holds through the rest of the 2026 monsoon and peak summer season will depend on how far power-plant coal stocks are allowed to run down before the government intervenes to push utilities back toward the import market.
Primary Sources
Related Topic Express coverage
Featured image: Photo via Unsplash (photo-1473341304170-971dccb5ac1e); free to use under the Unsplash License. Illustrative only.
