Will India Achieve a Record 1.15 Billion Tonnes Coal Production in FY26?
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Synopsis
India is on the verge of breaking coal production records, aiming for 1.15 billion tonnes in FY26. With significant policy reforms and government initiatives, the country is enhancing its coal output to meet rising power demands. Discover how these changes are reshaping India's energy landscape and driving self-reliance in coal production.
Key Takeaways
- India targets 1.15 billion tonnes in coal production for FY26.
- Domestic production reached 1,047.6 million tonnes in FY25.
- Government reforms have significantly boosted coal mining efficiency.
- Power sector demand drives 82 percent of total coal dispatches.
- Coal prices are expected to remain affordable due to favorable policies.
New Delhi, July 5 (NationPress) India is poised to reach a historic coal production milestone of 1.15 billion tonnes in the financial year 2025-26, as indicated by a recent report.
In FY25, the nation’s coal production soared to an unprecedented 1,047.6 million tonnes, exhibiting an average annual growth rate of 10 percent over the last five years, according to data from CareEdge Ratings.
This remarkable increase has been fueled by numerous policy reforms aimed at enhancing the efficiency and self-sufficiency of coal mining.
Significant government initiatives such as the Single Window Clearance system, the Mine Developer and Operator (MDO) model, full FDI allowance in coal mining, and frequent coal block auctions have significantly boosted domestic coal production.
Furthermore, revisions to the Mines and Minerals (Development and Regulation) Act have effectively removed regulatory obstacles, attracting private sector participation.
The surge in coal production is in direct response to escalating demand from the power sector, which comprised 82 percent of total coal dispatches in FY25.
India's overall coal consumption increased from 922.2 million tonnes in FY21 to 1,270 million tonnes in FY25, driven by rising electricity demands across various sectors, households, and rural areas, as reported.
The proportion of domestic coal in total consumption has also risen, moving from 77.7 percent in FY21 to 82.5 percent in FY25.
This shift toward self-reliance has been bolstered by the allocation of 184 coal mines by January, with 65 blocks already in production.
According to the report, these operational mines produced approximately 136.59 million tonnes in FY25, reflecting a growth of over 34 percent compared to the prior year.
Coal India Limited (CIL), the premier coal producer, accounted for around 74 percent of the total output in FY25.
Private and captive miners have also performed commendably, with advancements in logistics and technology enhancing the viability of coal blocks.
The recent 12th round of coal block auctions, initiated in March, introduced another 28 mines to further amplify domestic production.
In the meantime, coal prices have steadily declined due to improved supply conditions and favorable government policies.
This trend is anticipated to persist in FY26, making coal more accessible for industries, as per the report.
Point of View
I believe that India's journey towards achieving a record coal production figure is a testament to the government's commitment to energy self-sufficiency. The proactive measures taken to enhance coal mining efficiency are crucial for meeting the burgeoning energy demands. This strategic approach not only strengthens our energy security but also boosts economic growth and job creation in the sector.
NationPress
22/07/2025
Frequently Asked Questions
What is India's coal production target for FY26?
India aims to achieve a record coal production of 1.15 billion tonnes in FY26.
What factors are driving coal production growth in India?
The growth is driven by policy reforms, government initiatives, and rising demand from the power sector.
How much did India's coal consumption increase from FY21 to FY25?
India's coal consumption rose from 922.2 million tonnes in FY21 to 1,270 million tonnes in FY25.
What percentage of total coal dispatches was accounted for by the power sector in FY25?
The power sector accounted for 82 percent of total coal dispatches in FY25.
How has the share of domestic coal in total consumption changed?
The share of domestic coal in total consumption increased from 77.7 percent in FY21 to 82.5 percent in FY25.
