While the government plans to implement a mandate requiring steel companies to use 30 per cent coking coal to reduce dependence on imports, domestic coal production itself is showing signs of strain.
Demand for coal is high, driven by the need for coal-based cooking fires due to the LPG shortage and an even greater need for coal-based electricity, raising questions about alternative options.
India's domestic coal production is dominated by CIL (Coal India Limited), a PSU under the Ministry of Coal and its eight other subsidiaries. Coal India Limited Chairman MD B Sairam recently said how the crisis in the Middle East “mainly affected gas-based power plants, creating challenges in electricity generation.”
“If gas output falls, coal must step in to fill the gap, and as the largest producer, Coal India carries the biggest responsibility. As its chairman, I can confidently say our team is fully prepared, with sufficient coal stocks to meet demand. There is no disruption in coal production or supply,” Sairam told ANI.
But data conveys a slightly different story. According to the Ministry of Coal, India's total domestic coal production slipped by 0.64 per cent to 1040MT in March 2026 from 1047MT in March 2025. Out of this, Coal India Limited, which accounts for close to 80 per cent of the country's total production, alone recorded a steeper 1.65 per cent decline, falling to 768MT in March 2026 from 781MT in March 2025.
Of CIL's eight subsidiaries, four recorded declining production rates from March 2025. The three largest declines are 12.30 per cent for BCCL, 8.81 per cent for WCL, and 6.09 per cent for CCL. Though these production rates are lower, their contribution to overall production is much lower than that of Coal India Limited.
India's most prominent coal import is coking coal, imported primarily by the Steel Authority of India and private steel companies. According to the Ministry of Coal, imports had eased last fiscal, when it saw a year-on-year 2.10 per cent dip in FY 2024-25. However, with almost 85 per cent of coking coal used in steel production being imported, India remains the world's largest importer of coking coal.
Demand for coal is expected to cross 1.5 billion tonnes by 2030, and if the gap between demand and production persists, dependence on imports will increase.
According to the ministry, 77 per cent of the country still depends on coal for electricity, and with rising demand, alternatives to coal-based power generation can be considered.
Alternatives like solar and wind power are also relatively cheaper in terms of tariff. Waree, a global energy transition company, says that coal-based power costs ₹6-10 per unit and rises with annual fuel inflation.
While solar power panel installations are expensive, ranging from ₹75,000 to ₹80,000 per kW, government subsidies reduce the cost by up to 40 per cent, and tariffs for solar power are much lower, ranging from ₹2.5 to ₹2.6 per kWh. Residential wind energy turbines are more expensive, with 1kW systems costing ₹1.2–1.8 lakh. However, wind energy tariffs are still cheaper than coal-based power, costing around ₹2.69–3.70 per kWh.
Considered together, the data suggest that while policy efforts aim to decrease dependence on imports, slowing domestic production and rising demand could widen the gap, making the case for scaling up alternative energy sources more urgent.