India set to clock record 1.15 billion tonnes coal production in FY26

IANS July 5, 2025 462 views

India is set to achieve a record-breaking 1.15 billion tonnes of coal production by FY26, building on recent growth. Policy reforms like FDI in mining and auctioned coal blocks have significantly boosted domestic output. Rising electricity demand has pushed coal consumption to 1.27B tonnes, with domestic supply meeting 82.5% of needs. Coal India remains the largest contributor, while private miners also show strong performance.

"These active mines produced around 136.59 million tonnes in FY25, registering a growth of over 34 per cent compared to the previous year." – CareEdge Ratings
India set to clock record 1.15 billion tonnes coal production in FY26
New Delhi, July 5: India is on track to achieve a record coal production of 1.15 billion tonnes in the financial year 2025-26, according to a new report.

Key Points

1

Coal production hit 1.05B tonnes in FY25 with 10% annual growth

2

Policy reforms like FDI allowance boosted private mining

3

Power sector drives 82% of coal demand in India

4

Coal India contributes 74% of total domestic output

The country’s domestic coal production touched an all-time high of 1,047.6 million tonnes in FY25, growing at an average annual rate of 10 per cent over the past five years, as per data compiled by CareEdge Ratings.

This growth has been driven by a series of policy reforms aimed at making coal mining more efficient and self-reliant.

Key government initiatives like the Single Window Clearance system, the Mine Developer and Operator (MDO) model, 100 per cent FDI allowance in coal mining, and regular auctions of coal blocks have helped boost domestic output.

Amendments to the Mines and Minerals (Development and Regulation) Act have also played a major role in removing regulatory bottlenecks and attracting private players.

The rise in coal production has come in response to growing demand from the power sector, which accounted for 82 per cent of the total coal dispatches in FY25.

India’s total coal consumption rose from 922.2 million tonnes in FY21 to 1,270 million tonnes in FY25, driven by increasing electricity needs across industries, households, and rural areas, said the report.

The share of domestic coal in total consumption has also gone up -- from 77.7 per cent in FY21 to 82.5 per cent in FY25.

This shift towards self-reliance has been supported by the allocation of 184 coal mines by January, out of which 65 blocks have already begun production.

"These active mines produced around 136.59 million tonnes in FY25, registering a growth of over 34 per cent compared to the previous year," the report said.

Coal India Limited (CIL), the largest coal producer, contributed around 74 per cent of the total output in FY25.

Private and captive miners also showed strong performance, with better logistics and improved technology enhancing the viability of coal blocks.

The 12th round of coal block auctions launched in March offered another 28 mines to further push domestic output.

Meanwhile, coal prices have seen a steady decline due to better supply conditions and supportive government policies.

This trend is expected to continue in FY26, making coal more affordable for industries, according to the report.

Reader Comments

S
Shreya B
As someone from Jharkhand, I've seen both sides - more jobs from coal mines but also environmental damage. Hope the government ensures proper rehabilitation and pollution control measures.
A
Arjun K
This is what Atmanirbhar Bharat looks like! Reducing imports and creating employment. Next target should be 1.5 billion tonnes 💪
P
Priya S
While the numbers are impressive, I'm concerned about the health impacts in mining areas. My cousin in Chhattisgarh says respiratory diseases have increased 3x in their village near coal mines.
K
Karthik V
Good to see private sector participation increasing. Competition will improve efficiency and bring down costs. Hope the benefits reach end consumers through lower electricity bills.
D
David E
As an energy analyst, I must say India's coal story is remarkable. But the real challenge is modernizing old power plants to make them more efficient and less polluting.
N
Nisha Z
What about the forest land being diverted for mining? We're losing precious biodiversity. There has to be a better balance between development and conservation.

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Coal production India FY26 coal target Coal India Power sector demand Mining reforms