India’s dependence on imported coal is expected to persist, with S&P Commodity Insights projecting overall coal imports to reach around 250 million tons by 2030, including 150–180 million tons of thermal coal.
Bucking the government’s push to taper coal imports, volumes are expected to remain strong through 2030, driven essentially by the non-power sector, with power plants continuing to import 60-80 million metric tonnes annually, according to S&P Commodity Insights
India’s dependence on imported coal is expected to persist, with S&P Commodity Insights projecting overall coal imports to reach around 250 million tons by 2030, including 150–180 million tons of thermal coal.
As per S&P commodity insights, India’s coal demand is expected to rise around 60% by 2050, and though most of this will be met domestically, imports are unlikely to flag significantly.
While power plants will drive imports, the non-power sector is likely to account for a lion’s share. Power producers may continue to import 60-80 million metric tonnes of coal for electricity production through 2030.
“Domestic coal below a certain specification is plagued by high ash content, in the range of 30%-45% compared to imported coal's 6%-20%.
The scarcity of high calorific value coal and high sulfur content compounds the challenges in the domestic market, as substitutes are currently available only in seaborne coal,” said Pritish Raj, Managing Editor for Asia Thermal Coal, S&P Global Commodity Insights.
India is working aggressively towards streamlining domestic coal transport issues. However, shortage of railway rakes, slow progress in dedicated freight corridors and expensive transportation continue to support import demand. The coal ministry’s ‘Mission Coking Coal’ aims to increase domestic coking coal production to 140 MT by FY 2029-30, thereby reducing dependency on imports in the steel sector.
“India's pace of domestic coal production has been phenomenal; going by the same, we estimate that India's 1.5 billion metric tonne production target is reasonable, fuelled by a multi-pronged approach involving private investments, mine auctions, merchandised coal transportation, as well as friendly government policies,” said Pritish.
The government introduced commercial coal mine auctions in 2020, encouraging private sector participation and modern technological adoption. As of January 2025, the Ministry of Coal has allotted 184 mines, with 65 blocks receiving Mine Opening Permissions. Total production from these blocks has reached 136.59 MT, registering a 34.20% year-on-year increase. This is expected to exceed the 170 metric tonne target in FY 2024-25.