India Seeks To Cut Power Sector Coal Imports By 30 Per Cent

06 Mar 2026 CW Team

India is seeking to cut power sector coal imports by 30 per cent this year, according to government sources, as it moves to bolster domestic supply and reduce external dependence. The move is intended to ease pressure on the trade deficit and improve energy security while meeting seasonal demand peaks. Officials have signalled a coordinated approach across ministries and state utilities to meet the target.

Measures under consideration include accelerating output from domestic coal producers, unlocking stranded captive coal blocks and improving rail freight capacity to deliver fuel to plants. Authorities are also assessing logistics bottlenecks at ports and switching discretionary demand where possible towards lower carbon alternatives and gas. The strategy will be phased to avoid disruption to grid stability and to preserve reserves for peak periods.

Market participants expect importers and overseas suppliers to adjust shipments as New Delhi seeks to reduce reliance on external coal, which could moderate spot market volatility. Analysts say lower imports may relieve some pressure on freight and port handling and could ease upward pressure on domestic coal prices, though much will depend on demand fluctuations and monsoon patterns. The government will monitor stock levels and may use price mechanisms and directed procurement to smooth supply.

Officials emphasise that the import reduction target is contingent on sustained domestic output increases and infrastructure upgrades, and that contingency plans are being readied to prevent shortfalls. The strategy is presented as part of a broader effort to balance energy security, affordability and climate commitments while supporting investment in renewables and storage. Implementation will be tracked through interagency coordination and regular reporting to ensure targets are met without compromising grid reliability.

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