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India Shelves Coal Import Plan Amid Surging Costs and Low Power Plant Stocks
M
Moneycontrol•19-10-2026, 18:26
India Shelves Coal Import Plan Amid Surging Costs and Low Power Plant Stocks
- •India has dropped a proposal to mandate coal imports for power plants due to soaring international prices and a weaker rupee.
- •Policymakers are relying instead on state-owned Coal India Ltd. to increase domestic production and improve railway transport.
- •Coal reserves at power plants have dropped to a five-year low following high electricity demand driven by a poor monsoon.
- •Nearly half of the country's power plants faced critical fuel inventory levels as of October 17.
- •The government anticipates that cooler weather will soon slow down power consumption and help replenish depleted reserves.
Key Questions Answered
India shelved the proposal to mandate coal imports because rising seaborne prices and a weaker rupee significantly inflated incoming shipment costs, with benchmark thermal coal prices reaching a three-year high.
Policymakers have directed the state-owned enterprise Coal India Ltd. to increase its output while asking the railway sector to help ensure timely transport to power stations.
Coal reserves plunged to a five-year low because a poor monsoon kept temperatures elevated past the summer months, driving up cooling and irrigation electricity demand while lowering hydropower output and stretching coal plants.