India’s Coal Output Falls Again Amid Lower Power Demand

28 Nov 2025 CW Team

India’s coal production and despatch declined for the second consecutive month in October 2025, driven largely by reduced demand from the Power sector, which also saw lower electricity consumption.

According to the Coal Ministry, nationwide coal production fell by 8.5 per cent year-on-year to 77.43 million tonnes on a provisional basis. Despatch dropped by nearly 5 per cent year-on-year to 80.44 million tonnes.

Industrial Production Index data reflected the same trend. Coal production, which carries a weight of 10.33 per cent, declined by 8.5 per cent year-on-year in October 2025, while its cumulative index for April–October FY26 fell by 2 per cent.

Lignite output also fell for the second month in a row. Production in October slipped by just over 1 per cent to 3.04 million tonnes, though despatch rose by 1.34 per cent to 3.40 million tonnes.

Electricity consumption across India declined to 132 billion units in October 2025, representing a 6 per cent year-on-year drop.

Coal-based power generation was lower both in October 2025 and during April–October 2025, at 93.61 billion units and 718.02 billion units respectively, compared with 108.76 billion units and 760.50 billion units in the same periods of 2024. Coal’s share in total power generation increased to 67.21 per cent, up from around 63 per cent in September 2025.

Lower coal demand also resulted in fewer railway rakes being required. Daily rake loading fell by 3.47 per cent year-on-year to 289.6 rakes, with Power sector demand down 5.49 per cent year-on-year to 254.8 rakes.

The fall in electricity demand contributed to lower prices on power exchanges. The Indian Energy Exchange (IEX) reported that increased hydro, wind and solar generation, along with steady coal-fired supply, boosted liquidity and led to lower Day Ahead Market (DAM) and Real Time Market (RTM) prices.

The market clearing price in the DAM fell to Rs 2.67 per unit, down 32 per cent year-on-year, while RTM prices declined by nearly 28 per cent to Rs 2.73 per unit.

Coal production and despatch had also fallen in June and July 2025 due to monsoon conditions that usually reduce mining activity. Typically, coal operations slow during the monsoon and recover between October and March, aligning with festival, marriage and travel seasons.

However, 2025 has been atypical, with power consumption declining from May onwards as early rains moderated temperatures. This contrasts with 2024, when peak power demand hit a record 250 gigawatts in May.

To meet future demand through domestic sources and limit non-essential imports, India expects coal production to grow by 6–7 per cent annually over the coming years, targeting 1.5 billion tonnes by FY30. All-India coal output rose by about 5 per cent year-on-year to 1,047.67 million tonnes in FY25, up from 997.83 million tonnes in FY24.

India’s coal production and despatch declined for the second consecutive month in October 2025, driven largely by reduced demand from the Power sector, which also saw lower electricity consumption. According to the Coal Ministry, nationwide coal production fell by 8.5 per cent year-on-year to 77.43 million tonnes on a provisional basis. Despatch dropped by nearly 5 per cent year-on-year to 80.44 million tonnes. Industrial Production Index data reflected the same trend. Coal production, which carries a weight of 10.33 per cent, declined by 8.5 per cent year-on-year in October 2025, while its cumulative index for April–October FY26 fell by 2 per cent. Lignite output also fell for the second month in a row. Production in October slipped by just over 1 per cent to 3.04 million tonnes, though despatch rose by 1.34 per cent to 3.40 million tonnes. Electricity consumption across India declined to 132 billion units in October 2025, representing a 6 per cent year-on-year drop. Coal-based power generation was lower both in October 2025 and during April–October 2025, at 93.61 billion units and 718.02 billion units respectively, compared with 108.76 billion units and 760.50 billion units in the same periods of 2024. Coal’s share in total power generation increased to 67.21 per cent, up from around 63 per cent in September 2025. Lower coal demand also resulted in fewer railway rakes being required. Daily rake loading fell by 3.47 per cent year-on-year to 289.6 rakes, with Power sector demand down 5.49 per cent year-on-year to 254.8 rakes. The fall in electricity demand contributed to lower prices on power exchanges. The Indian Energy Exchange (IEX) reported that increased hydro, wind and solar generation, along with steady coal-fired supply, boosted liquidity and led to lower Day Ahead Market (DAM) and Real Time Market (RTM) prices. The market clearing price in the DAM fell to Rs 2.67 per unit, down 32 per cent year-on-year, while RTM prices declined by nearly 28 per cent to Rs 2.73 per unit. Coal production and despatch had also fallen in June and July 2025 due to monsoon conditions that usually reduce mining activity. Typically, coal operations slow during the monsoon and recover between October and March, aligning with festival, marriage and travel seasons. However, 2025 has been atypical, with power consumption declining from May onwards as early rains moderated temperatures. This contrasts with 2024, when peak power demand hit a record 250 gigawatts in May. To meet future demand through domestic sources and limit non-essential imports, India expects coal production to grow by 6–7 per cent annually over the coming years, targeting 1.5 billion tonnes by FY30. All-India coal output rose by about 5 per cent year-on-year to 1,047.67 million tonnes in FY25, up from 997.83 million tonnes in FY24.

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