India Raises Domestic Coal Use to Over 50% at Import-Based Power Plants

Key Takeaways

1. India is now running 5.7 GW of capacity at import-based power plants on domestic coal, out of a total 18.7 GW, while trials are underway for another 4.3 GW. The coal ministry is offering doorstep supply to these plants.
    
2. Until now, import-dependent power plants primarily depended on imported coal from Indonesia, South Africa, and Russia. The imports in Indonesia and South Africa declined by 21% and 68%, respectively, between January and April 2026, as compared to January-April 2025.

Is India Finally Cutting Its Coal Import Bill at Power Plants?

India is raising domestic fuel use to over 50% at power plants built to run on imported coal.  India is the world’s second-biggest consumer of thermal coal imports and is looking to slash expenses from purchasing coal overseas. This has been confirmed by the government and industry officials on June 24, 2026.

The nation has already utilised domestic coal to run 5.7 GW of imported-fuelled power capacity in 2026. Total capacity at these plants is 18.7 GW. Trials are now underway to shift another 4.3 GW to domestic coal. Some plants are now running on as much as 70% domestic coal. This directly reduces India’s foreign exchange spending on fuel imports.

How does this Shift affect Electricity Consumers in India?

Lower import bills can ease pressure on power tariffs for Indian consumers over time. Imports of thermal coal by India have fallen to a 4-year low of 65 million metric tonnes from January-May 2026. This has happened because there is a lot of renewable energy in India, which has made domestic coal available for coastal power plants. Generation from coal in India has increased by 10% in May 2026 as compared to May 2025, which was the largest increase since May 2024.

The switch to domestic coal does carry risks for consumers. Domestic coal has higher ash content than imported varieties. Plant operators must modify equipment to handle this difference. Boiler recalibration costs can be high. Around 50 million tonnes of coal imports were used in the power sector in 2025. Such an amount of replacement requires some technical developments and a consistent domestic coal supply chain.
 

What are Experts and Officials saying about this Coal Transition?

One government official said plant operators have gradually modified units to handle greater volumes of local coal, which has higher ash content. Another official noted, “The coal ministry has offered doorstep supply to imported-coal plants, which could take care of the quality and quantity needed without any issues.” Import-based plants have already booked 16 million metric tonnes of domestic coal for their upcoming needs.

NITI Aayog’s energy adviser Rajnath Ram said at the end of 2025 that “we cannot be subjective about coal. The question is how sustainably we can use it.” Renewable energy addition by India has reached 41GW in the first 11 months of 2025, which makes it a record year and renewables capacity share of 40% of total installed capacity, according to the Centre for Research on Energy and Clean Air. This renewable growth is the primary enabler of the domestic coal switch at coastal plants.

Personal loans amounted to ₹8.80 lakh crore during FY2025, while the average loan amount was ₹4.8 lakh per person, according to a LoansJagat report. This initiative by India is aimed at cutting costs by lowering expensive coal imports in order to maintain stable electricity tariffs.

Conclusion 

India’s move to cut coal imports is gaining clear momentum in 2026. With 16 million metric tonnes of domestic coal already booked by import-based plants and 4.3 GW more under trial, the policy is moving from plan to execution. The real test will be whether plant upgrades keep pace and whether domestic supply chains stay consistent through peak demand months.

FAQs

How do imported coal-based thermal power plants in India blend domestic coal into their fuel mix? 

Plant operators run a mix of imported and domestic coal. Some plants now use up to 70% domestic coal. The coal ministry is offering doorstep supply to these plants. Coal import plants have already ordered 16 million metric tonnes of domestic coal for 2026.

How do Indians feel about the closure of coal-powered plants in favor of renewables?

A study by IPSOS indicates that 82% of Indians surveyed support the concept of not constructing any more coal-based plants and shutting down those already constructed, opting for renewable sources of energy like wind/solar power. The first eleven months of 2025 saw the addition of 41 GW of renewable energy in India, states CREA. Import-based plants have already booked 16 million metric tonnes of domestic coal for their needs in 2026.