Thermal Power Coal Imports Drop 27 Per Cent In FY26

31 Jul 2026 CW Team

The decline followed government measures to bolster domestic supply and fuel security for the power sector. These steps included raising the Annual Contracted Quantity (ACQ) to 100 per cent of normative needs for eligible plants and ensuring coal supplies to meet Power Purchase Agreement (PPA) obligations. The Revised Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) Policy, 2025 enabled Imported Coal-Based (ICB) plants to source domestic coal and allowed Fuel Supply Agreement (FSA) holders to obtain coal beyond contracted volumes under specified terms.

Authorities have also advanced logistics under an Integrated Coal Logistics Plan that targets 33 critical railway projects and expanded First Mile Connectivity (FMC). A total of 139 FMC projects with planned capacity of 1,319 million tonnes (mn t) are targeted by fiscal 2029-30, while coal public sector undertakings are pursuing eight railway projects to improve evacuation from mining regions. The ministry said enhanced rail links and multimodal routes will help ease bottlenecks and support higher domestic coal consumption.

Imports remain permitted under the Open General Licence (OGL) regime, but the policy aim is to eliminate non-essential imports via greater domestic production. The ministry noted that removal of the GST compensation cess has enhanced the competitiveness of domestic coal, and Coal India Limited (CIL) has kept notified prices largely stable, with most grades recording only a marginal rise of Rs 20 per t over eight years. Recent auction rounds under Window-II of the Revised SHAKTI Policy allowed power producers to secure supplies at near-zero premiums, lowering fuel costs across time horizons.

India's thermal power sector cut imports in fiscal 2025-26, with coal imports by thermal plants falling to 45.4 million tonnes (mn t) from 62.5 mn t in the prior year, a decline of around 27.4 per cent. Imports by plants designed to run on imported coal fell nearly 27.45 per cent year-on-year in April 2026, data placed in Parliament showed. The information was supplied by the Minister of State for Coal and Mines, Satish Chandra Dubey, in a written reply to the Rajya Sabha on 27 July 2026. The decline followed government measures to bolster domestic supply and fuel security for the power sector. These steps included raising the Annual Contracted Quantity (ACQ) to 100 per cent of normative needs for eligible plants and ensuring coal supplies to meet Power Purchase Agreement (PPA) obligations. The Revised Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) Policy, 2025 enabled Imported Coal-Based (ICB) plants to source domestic coal and allowed Fuel Supply Agreement (FSA) holders to obtain coal beyond contracted volumes under specified terms. Authorities have also advanced logistics under an Integrated Coal Logistics Plan that targets 33 critical railway projects and expanded First Mile Connectivity (FMC). A total of 139 FMC projects with planned capacity of 1,319 million tonnes (mn t) are targeted by fiscal 2029-30, while coal public sector undertakings are pursuing eight railway projects to improve evacuation from mining regions. The ministry said enhanced rail links and multimodal routes will help ease bottlenecks and support higher domestic coal consumption. Imports remain permitted under the Open General Licence (OGL) regime, but the policy aim is to eliminate non-essential imports via greater domestic production. The ministry noted that removal of the GST compensation cess has enhanced the competitiveness of domestic coal, and Coal India Limited (CIL) has kept notified prices largely stable, with most grades recording only a marginal rise of Rs 20 per t over eight years. Recent auction rounds under Window-II of the Revised SHAKTI Policy allowed power producers to secure supplies at near-zero premiums, lowering fuel costs across time horizons.

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