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

India is likely to reach a record 1.15 billion tonnes coal production in FY26, backed by policy reforms and strong demand from the power sector. Domestic output rose sharply in FY25, with Coal India and private miners contributing significantly

New Delhi: 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.

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.

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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.