India is cutting its reliance on imported coal, with domestic fuel now making up 50% of the mix at many power plants historically run on imported coal, industry and government officials told Reuters. Some facilities have reached a 70% share of domestic coal, signaling a sharp shift in fuel sourcing strategy.
Rising domestic coal production and an expanding renewables base have driven imports to multi-year lows. The country is leaning on its own resources to meet growing electricity demand while reducing exposure to volatile global coal markets.
Power producers are blending domestic and imported coal at existing coal-fired plants, a move that cuts foreign exchange spending and logistics costs. The policy shift is designed to bolster energy security without major new infrastructure investment in the near term.
Geopolitically, the pivot away from imported coal reduces India's dependence on suppliers like Indonesia and Australia. It also aligns with broader efforts to insulate the economy from supply chain disruptions and price swings tied to global coal trade routes.
Some analysts caution that domestic coal quality and consistency may fall short for certain plant specifications, potentially limiting the scope of substitution. The long-term trajectory of India's coal imports will depend on domestic production growth and the pace of renewable capacity additions, officials noted.