Coal Imports For Power Blending Plunge 54% In Apr–Dec

India’s reliance on imported coal for blending with domestic supplies has dropped sharply in the current financial year, reflecting higher domestic output and improved coal inventory at power plants. Government figures show the volume of imported coal used for blending plunged by more than half in the April–December period, a shift with implications for foreign-exchange outflows, short-term power plant economics and seaborne coal markets. What does the fall mean for utilities, traders and the broader energy balance?

Why Did Imported Coal For Blending Fall So Steeply?

Imported coal volumes earmarked for blending with domestic feedstock fell by 54.17% during April–December, according to the government’s year-end review. The report states that imported coal for blending up to 25 December amounted to 5.5 million tonnes (MT), down from 12 MT in the same period a year earlier.

The ministry attributed the decline to an “abundant and uninterrupted supply of coal to the power sector” following higher domestic production and improved logistics.

This reduction follows sustained policy and operational emphasis on ramping up domestic output from state and private mines, including production gains reported by Coal India Limited and higher dispatches to thermal power plants, which reduced the need to import higher-calorific or specific grade coals for blending.

How Did Stocks And Domestic Supply Influence Blending Demand?

The Ministry of Power’s review noted that TPP (Thermal power plant) stocks crossed the 50 MT mark earlier in the season (22 November), well ahead of the prior year and reported stocks of about 51.7 MT as of 21 December, with a target to reach 66 MT by March.

Higher on-site inventories and improved domestic dispatches allowed many plant operators to stop or reduce blending runs that required imported grades.

The ministry also confirmed a policy adjustment: the advisory that encouraged blending with imported coal was discontinued beyond mid-October, reflecting the changed availability dynamics. That regulatory change both signalled and reinforced a reduced operational reliance on imports.

What Are The Economic and Market Consequences?

Reduced import volumes cut immediate foreign-exchange pressure and lowered the import bill for thermal coal: official statements have noted a material saving in import expenditure as domestic production displaces seaborne purchases.

At the same time, the slump in blending imports contributes to softer seaborne demand, a development picked up by commodity analysts and global news desks as part of a broader decline in Asian seaborne coal flows. Traders and exporters that earlier targeted the Indian market with high-calorific cargoes have had to shift volumes or seek alternative buyers.

For domestic power generators, the decline in blending imports reduces exposure to volatile international prices and shipping costs; however, plants that rely on higher-grade imported coals for certain boiler configurations may face operational trade-offs or need to invest in boiler modifications or fuel-handling solutions. Market participants say the net effect depends on plant vintage, blending ratios and local rail/road logistics.

Will This Trend Persist or Reverse?

Several factors will determine whether the steep drop in blending imports continues:

1. Sustained domestic production growth and timely dispatch by the Ministry of Coal and miners.

2. Seasonal demand swings (monsoon logistics and summer peaks)

3. Global seaborne price competitiveness.

Early-season inventory cushions and policy nudges favour lower imports in the near term, but any prolonged domestic supply disruption, a sharp rebound in power demand or technical need for specific imported grades could prompt renewed purchases. International analysts note India’s move to raise domestic output has already altered Asia’s import picture.

Sources:

PIB

PIB

The Indian Express

Ministry of Coal