India Shelves Mandatory Coal Import Plan for Power Plants Amid Rising Costs and Supply Concerns

New Delhi, October 19, 2026: India has shelved a proposal to make coal imports mandatory for power plants as rising international coal prices and a weaker rupee increase the cost of overseas supplies, according to a Bloomberg News report published by The Economic Times. The government is instead focusing on boosting domestic coal production and improving transportation to electricity-generating stations.

The proposal had been considered as a measure to replenish declining coal inventories at thermal power plants. Under the plan, power stations would have been asked to blend imported coal with domestically sourced supplies to ease the fuel shortage.

However, the higher cost of seaborne coal has made the proposed approach less attractive, particularly as India’s overall energy import bill faces pressure from elevated international fuel prices. Reuters reported that it could not independently verify Bloomberg’s report. Government Turns to Domestic Coal Production

Policymakers have instead asked state-owned Coal India Ltd to increase output and called on Indian Railways to help ensure timely transportation of coal to power plants, according to the report.

The strategy aims to improve the availability of domestically mined coal while reducing the need for expensive overseas purchases. Rail transportation remains a crucial part of the supply chain because delays in moving coal from mining regions can worsen shortages at power stations.

The decision also reflects India’s broader policy focus on strengthening domestic coal supplies and reducing unnecessary import dependence.

Coal Stockpiles Under Pressure

India’s coal-fired power plants have faced pressure from elevated electricity demand and weather-related disruptions. A weaker monsoon has reduced hydropower generation, while hotter-than-usual conditions have increased electricity consumption for cooling and irrigation.

According to Bloomberg’s report, coal inventories at Indian power plants have fallen to their lowest level in nearly five years. Nearly half of the country’s power plants had critically low fuel inventories as of October 17, based on data cited from the Power Ministry. <Cite refs={[“turn320987news7”]}/>

The government had previously required more than 100 captive coal-fired power plants to operate at maximum capacity from October 1 through the end of 2026 to help meet expected electricity demand.