India has shelved a proposal to mandate coal imports for power plants after rising seaborne prices and a weaker rupee increased the cost of overseas supplies. The government had considered requiring plants to blend imported coal with domestic grades to address shrinking inventories and ease the supply crunch.

The proposal was discussed by policymakers in recent weeks but was abandoned because of the higher import costs, according to people familiar with the matter. Officials have instead asked state-owned Coal India to increase production, while the railway has been urged to ensure more timely deliveries to power stations. The power ministry and Coal India had not immediately responded to requests for comment.

Coal reserves at India’s power plants have fallen to their lowest level in nearly five years. A weak monsoon kept temperatures elevated beyond the summer period, increasing electricity demand for cooling and irrigation, while below-normal rainfall reduced hydropower generation. The combination raised dependence on coal-fired stations and depleted their inventories.

Nearly half of the country’s power plants had critical fuel stocks on October 17, with inventories below a quarter of the level considered necessary, power ministry data showed. The electricity deficit also increased in September, producing the worst shortages for that month in nearly a decade. Thermal coal prices have reached their highest level in three years, making imports less attractive while higher oil prices are already increasing India’s energy costs.

The government expects cooler weather to moderate power consumption as domestic coal supplies recover. Average daily inventory reductions at coal-fired facilities were about 48,000 t during the first 17 days of October, according to calculations based on ministry data. That was around one-fifth of the depletion rate recorded in September, indicating that the pace of stock drawdown had slowed despite continued high demand.