India’s coal production is set to touch the new record of 1,095 MT in 2026
| Photo Credit: Reuters
Coal demand in India is expected to increase by 4.2% year-over-year to 1,353 million tonnes (MT) in 2026 with production expected to scale yet another record at 1,095 MT, the International Energy Agency (IEA) said in its mid-year report Thursday.
The IEA attributed this to government’s objective of addressing elevated domestic and industrial demand by focussing efforts on bolstering domestic supply, reducing import dependence and utilising already-elevated stocks at mine pitheads.
In contrast, the Paris-headquartered inter-governmental organisation sees global coal demand to increase 1.2% to 8.94 billion tonnes (BT) during the same period although production may slide downwards 2% but remaining about 9 BT.
El Niño conditions, enhanced power demand
IEA attributes projections about elevated coal demand in India to enhanced requirement for power – notwithstanding the spike in renewable sources-based power capacities – alongside El Niño conditions which are expected to spur cooling requirements amid lower hydropower availability.
It further projected industrial demand “remains strong” citing growth in three of the largest coal-consuming sectors as pig iron, direct reduction of iron (DRI) and cement production.
Record production
According to the energy agency, India’s coal production is set to touch the new record of 1,095 MT in 2026 amid the government’s focus on bolstering domestic supply and reducing their dependence on import.
According to government data, India produced 1,047 MT of coal in FY 2024-25 and 1,040.08 MT in FY 2025-26.
However, it observed that high pithead inventories have “tempered output momentum” in the ongoing period.
“Coal India Ltd, which accounts for around three quarters of national production, reported lower figures in May as pithead stocks remained elevated. Amid this overcapacity, the company has been meeting customer demand by drawing down inventories,” it observed.
IEA also projects India’s imports of the coal to decline from 167 MT in 2025 to 160 MT in 2026 as high inventories and substitution efforts weigh on purchases from outside the country.
Forecasting a “stronger import demand from India” for metallurgical coal in 2027; the agency attributes this to expanding steel production and limited domestic availability of the high-quality coking coal.
Published – September 10, 2026 03:55 pm IST
