Domestic production surge trims India’s coal import bill by $7.93 billion in FY 2024-25

THEBUSINESSBYTES BUREAU

NEW DELHI, MAY 27, 2025

In a significant development for India’s energy and economic landscape, the country has registered a steep decline in its coal import bill, saving foreign exchange worth $7.93 billion (₹60,681.67 crore) in the financial year 2024-25. This drop is attributed to a marked increase in domestic coal production, according to a statement released by the Ministry of Coal on Tuesday.

India’s coal imports fell by 7.9 per cent to 243.62 million tonnes (MT) in FY25, compared to 264.53 MT in the previous fiscal. The Ministry credited this sharp decline to strategic policy interventions and production reforms aimed at boosting local output and reducing reliance on costly imports. Among the key contributors to the shift were the Centre’s initiatives like Commercial Coal Mining and the Mission Coking Coal, which collectively helped domestic production grow by 5 per cent over the previous year.

A deeper look reveals that the non-regulated sector—comprising industries such as steel, cement, and paper, which are not directly linked to electricity generation—led the way in reducing dependence on imported coal. Imports in this category dropped by 8.95 per cent year-on-year, indicating a significant shift towards indigenous sourcing. Interestingly, even as coal-based power generation grew by 3.04 per cent, the quantity of imported coal used for blending in thermal power plants fell sharply by 41.4 per cent, reflecting improved confidence in the availability and quality of domestically produced coal.

The Ministry emphasized that this development is aligned with the government’s broader goal of achieving a “Viksit Bharat”—a developed India—by strengthening energy security and promoting self-reliance. Coal remains the backbone of India’s energy system, particularly for core industries like power, steel, and cement. However, the country continues to face challenges in meeting domestic demand for coking coal and high-grade thermal coal, which are still largely imported due to limited availability within Indian reserves.

To address this, the government has been implementing various strategic measures aimed at boosting local production capacities while also ensuring the secure and sustainable supply of coal. These efforts are part of India’s dual approach: supporting immediate economic growth through conventional energy sources while simultaneously progressing toward long-term goals like reducing carbon emissions and expanding renewable energy capacity.