India allows coal exports amid strong domestic supply

India’s cabinet on Friday approved the export of coal as the country’s power plants hold surplus stocks, Information Minister Ashwini Vaishnaw said, as reported by Reuters.

Power plants with assured coal supplies will be allowed to export up to 50% of their allocated coal and to use coal more flexibly across group companies, Vaishnaw said.

India, the world’s second-largest coal producer, has been gradually opening its coal sector to private players and commercial mining as it seeks to meet rising energy demand and reduce reliance on imports.

The decision to allow exports comes as coal-fired power generation—typically accounting for about 75% of India’s electricity output—has declined year-on-year in seven of the first 11 months of 2025, the highest frequency of such declines since 2020.

The move is also expected to benefit state-run Coal India, which accounts for roughly three-quarters of the country’s coal production. India is the world’s second-largest coal producer and consumer after China.

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Power stations currently hold comfortable coal inventories due to strong domestic production and slower growth in electricity demand, consultancy iEnergy Natural Resources said in a report this week.

In a separate decision, the cabinet also approved the auction of coal for industrial use without end-use restrictions, except for coking coal, which will be excluded from the scheme.

Under the policy, domestic buyers will be able to secure long-term coal supplies through auctions, while traders will be barred from participating, the government said.

The government said the measures are aimed at accelerating the utilisation of coal reserves, simplifying business processes and reducing import dependence.

Editing by Reiner Simanjuntak