Coal India sales rose after six months as demand picked up.
Gas shortages and heat-driven power demand increased reliance on coal generation.
Higher inventories and domestic supply kept coal imports relatively subdued.
Coal India's sales in March surged for the first time in six months, the company told Reuters on April 1. This indicates a ramp-up in coal stocks ahead of peak summer amid a shortfall in gas supply due to the US-Israeli war against Iran.
Coal India also stated that its sales to customers rose slightly by 0.7% to 69.5mn tonnes in March, even though its output fell 1.5% to 84.5mn tonnes, Reuters reported citing a stock exchange filing.
1 April 2026
Get the latest issue of Outlook Business
The state-run company accounts for over 80% of the country's production and is the world's largest coal miner by output.
Coal India's offtake fell for six consecutive months after a 7.6% jump in August, boosting inventory levels at power plants as temperate weather dented India's power demand in 2025.
The higher stocks have kept import demand subdued despite the peak summer season approaching, said Vasudev Pamnani, director at Gujarat-based coal trader iEnergy Natural Resources.
Domestic coal remained relatively more attractive in certain segments, he said, adding that disruptions in liquefied natural gas supply and reduced gas-based power generation are expected to boost reliance on coal for power generation.
Reuters further reported that domestic coal was still more appealing in some areas. Disruptions in the supply of liquefied natural gas and a decrease in gas-based power generation are likely to make people more reliant on coal for power generation. India gets almost 75% of its electricity from coal, and Reuters said in March that the country would have to rely more on the fuel during the summer because of the gas shortage. India only gets about 2% of its electricity from gas, but during peak demand times or heat waves, the country uses about 8 to 10 gigawatts (GW) of gas power.
Without gas, India has told its coal plants to run at full capacity and not shut down as planned. It has also told industries to make their own power with their own captive generation plants so that households can get more of it.
This summer in India will be hotter than usual, with heat wave days in May expected to be higher than the average for that time of year.
Factors Behind Rising Power Demand
India’s coal demand has risen due to higher electricity needs during extreme heat and constrained gas supplies. According to a 2025 report by the International Energy Agency (IEA), coal continues to be the backbone of India’s power mix, acting as the primary source for baseload power and grid stability while renewables and other sources are growing.
Citing a Central Electricity Authority (CEA) report, MERCOM stated that India’s peak power demand is expected to rise to 459 GW by 2035-36 from 289 GW in 2026-27. The CEA report has also suggested diversifying the country’s energy reliance on sources such as solar, wind, hydroelectricity and energy storage systems to maintain grid reliability.
