September 11, 2026 - India is expected to post strong growth in coal consumption this year as rising electricity needs and expanding industrial activity keep the fuel firmly embedded in the country’s energy mix.

The International Energy Agency (IEA) forecasts India’s coal demand will increase 4.2% in 2026 to approximately 1.35 billion tonnes, rebounding from a decline of about 1% last year.

The increase comes even as India continues to rapidly add renewable energy capacity. Growing electricity consumption is expected to support coal-fired generation, while weather conditions could add further pressure to the power system.

The IEA said a particularly strong El Niño could increase electricity demand for cooling while reducing hydropower availability, creating additional demand for coal-fired power.

Industrial growth is also contributing to the increase. Production of pig iron, direct reduced iron and cement — three of India’s largest coal-consuming industrial sectors — is expected to remain strong.

India is particularly important to the outlook for metallurgical coal. The country is expected to be the primary source of growth in global coking coal demand in 2026 as steelmakers increase pig iron production to satisfy rising steel consumption.

Much of India's additional steel output is expected to come from blast furnace-basic oxygen furnace operations, which depend on coking coal.

At the same time, India is working to meet more of its overall coal requirements with domestic production.

The IEA expects Indian coal output to reach a record 1.095 billion tonnes in 2026, supported by government efforts to strengthen domestic supplies and reduce dependence on imports. Growth from captive and commercial mines is playing an increasingly important role in the country's production.

That expansion is helping reduce India's need for imported thermal coal. Seaborne thermal coal imports are expected to fall to about 160 million tonnes this year, compared with roughly 167 million tonnes in 2025, as high inventories and efforts to replace foreign coal with domestic supplies weigh on purchases.

Coking coal presents a different challenge. India has limited domestic supplies of the high-quality coal required by its steel industry, meaning rising steel production is expected to keep the country dependent on overseas metallurgical coal.

The IEA expects stronger Indian coking coal imports in 2027 as steel production continues to expand.

India’s growth is part of a broader reversal in the global coal outlook.

Worldwide coal consumption is now forecast to rise 1.2% in 2026 to a record 8.94 billion tonnes. The IEA had previously expected global demand to decline.

Energy disruptions associated with the conflict in the Middle East have contributed to the change. Reduced liquefied natural gas flows through the Strait of Hormuz have pushed natural gas prices higher, encouraging greater coal-fired generation in countries capable of switching between fuels.

China, the world's largest coal consumer, is also expected to increase demand by about 1% this year to approximately 5 billion tonnes.

Despite record demand, worldwide coal production is expected to decline in 2026, largely because of lower output in China following mine safety inspections. Global production is nevertheless forecast to remain above 9 billion tonnes for a third consecutive year.

India is moving in the opposite direction. The IEA expects the country to set another coal production record in 2027, underscoring the continued importance of domestic coal as India works to meet rapidly growing energy and industrial demand.