India seeks to slash imports of thermal coal used in its power sector by 30% this year as it wants to use more of its domestic coal supply, industry and government sources have told Reuters.
Last year, India’s power sector burned almost 50 million tons of imported thermal coal. This year, the country plans to slash that imported coal dependence by 15 million tons, according to Reuters’ sources with knowledge of the plans.
Yet, India will not use less coal overall—it will simply seek to replace the imported fuel with domestically produced coal, which has been surging in recent months.
The government has promised power plants that the domestic coal will not be of the lowest quality.
Despite the fact that renewables now dominate new power additions, India needs coal to continue to provide “dependable, cost-effective baseload power, anchoring system reliability as cleaner sources expand,” NITI Aayog, the policy think tank of the Indian government, said in a report earlier this month.
India’s coal demand could more than double by 2050 from current levels under current policies, the report said.
Under the Current Policy Scenario (CPS), coal demand in India is forecast to rise even through 2070, according to the projections.
In this scenario, long-term demand could more than double to 2.615 billion tons by 2050, up from 1.256 billion tons in 2025, the think tank’s analysis found. If India keeps the current policies, coal demand will be higher even in 2070 compared to 2025 levels.
The share of coal is set to drop from 73% in 2025 to 47% in 2070, thanks to the rise of renewable energy.
Despite booming renewable capacity additions, India continues to rely on coal to meet most of its power demand as authorities also look to avoid blackouts in cases of severe heat waves.
Coal will still be a key part of India’s power system for the next two decades, Rajnath Ram, adviser for energy at NITI Aayog, said in September 2025.
“We cannot be subjective about coal. The question is how sustainably we can use it,” the official noted.
By Tsvetana Paraskova for Oilprice.com
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