Delhi Approves Coal Exports As Power Plants Maintain Surplus Stocks Nationwide
Delhi has authorised the export of domestic coal as power plants report healthy stock levels across the country. Under the new policy, plants with secure coal supplies can export up to 50% of their allocation and share fuel across affiliated companies. The move comes amid slower electricity demand growth and strong domestic production, aiming to optimise coal utilisation, support industrial access, and reduce India’s reliance on imported coal while boosting operational efficiency in the energy sector.
India, the world’s second-largest coal producer, has been progressively opening its coal sector to private players and commercial mining to meet rising energy demand. Coal-fired power generation, which provides roughly 75% of the country’s electricity, experienced annual declines in seven of the past 11 months, the most significant slowdown since 2020. “Surplus stock levels combined with moderated demand create a window to rationalise coal usage and explore export opportunities,” a senior energy analyst noted.Coal India, the nation’s largest coal miner responsible for nearly three-quarters of production, stands to gain from the policy, as it allows power plants to manage surplus coal while maintaining supply security. The government emphasised that export approval would enhance market efficiency, reduce import dependence, and streamline business operations for energy producers.
In addition to exports, the cabinet cleared coal auctions for industrial use, permitting domestic buyers to secure long-term coal supplies without end-use restrictions, except for coking coal, which remains excluded. Traders, however, are prohibited from participating. “The auction system ensures predictable access to coal for industrial and power sectors while preventing speculative trading,” an official explained.Experts suggest the policy reflects a pragmatic balance between economic growth and energy security. By enabling flexible coal allocation, India can optimise reserves, support industrial operations, and maintain steady supply chains. This approach also encourages modernised storage, transportation, and handling practices, indirectly supporting cleaner operational procedures within coal-reliant sectors.Urban and industrial planners highlight additional implications: efficient coal management reduces the need for imports, which can lower associated transport emissions and strengthen urban energy infrastructure resilience. A senior urban energy consultant observed, “Optimising domestic coal flows helps cities and industries secure reliable energy while aligning with broader sustainability goals, even in a fossil-fuel dependent context.”
The dual approach of promoting exports and enabling industrial access signals India’s intent to make coal reserves work smarter, not harder. Power plants can leverage surplus stocks, industries gain reliable long-term supply, and the energy sector benefits from improved operational efficiency. While challenges remain in balancing domestic consumption and global demand, the policy positions India to strengthen its coal market while advancing incremental steps toward sustainable, efficient energy practices.
