India, the world’s second-largest coal consumer after China, will start exporting the key commodity by FY26, as the country is expanding its production base to meet domestic demand, which is expected to surpass 1 billion tonnes in FY23.

Coal Minister Pralhad Joshi, on Wednesday, said that India is expanding its coal production capacity to meet the burgeoning demand for the dry fuel on the back of the rising industrial base and increasing domestic power consumption.

During his speech at the launch of the seventh round of commercial coal auctions, Joshi noted that the country will start exporting coal by FY26.

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“All efforts are on to further enhance production and export of thermal coal by FY26,” he noted.

Joshi said that with a 14 per cent YoY increase, coal production is expected to touch 880 million tonnes (MT) in FY23 and offtake is likely to touch 900 MT.

Production and demand

India’s cumulative estimated coal reserve as of April 2022 stood at 3.61 lakh MT.

Domestic demand for coal is estimated to reach 1,087 MT in the ongoing financial year, which ends this month. Domestic production is expected to grow by 6-7 per cent annually in the next few years to reach about 1.5 billion tonnes in FY30.

Also read: India’s coking coal shipments up 9 per cent in April-February

The actual demand for coal increased to 1,027.92 MT in FY22 from 906.13 MT in FY21. For FY23, coal demand has been assessed by the Ministry to reach 1,087 MT.

In view of expected rise in coal demand due to economic growth, domestic coal production is proposed to increase to 1,017 MT in FY24 which is further likely to increase by 9-10 per cent in FY25.

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