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India’s coal market sees growth despite COVID-19 challenges

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World Coal,

According to GlobalData’s latest report, India’s coal production is expected to grow from 777 million t in 2020 to 827.8 million t in 2021, a 6.4% increase. This follows growth of 3.1% in 2020, an impressive feat given the operational disruption caused by COVID-19. The report indicates that the entry of private players to the industry has been key to this increase in output.

Vinneth Bajaj, Mining Analyst at GlobalData, comments:

“GlobalData expects coal production in India to grow at a compound annual growth rate (CAGR) of 9% to reach 1.2 billion t in 2025, meeting the Indian Government’s target of 1 billion t. However, COVID-19 will present some short-term challenges to this estimation.

“The sharp increase in new COVID-19 cases since the beginning of March 2021, and fresh lockdowns across key coal-producing states (such as Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra, and Telangana) has hampered India’s coal operations. Despite this, there was a slight recovery in coal offtake in April 2021, indicating a revival in demand over the coming months.”

While the report indicates that power demand is growing in the country, it is important to note that coal is being gradually phased out of power generation.

Bajaj adds:

“In 2020, around 73% of the electricity in India was generated from coal. However, India has environmental commitments to reduce carbon emissions to 50% by 2030. As a result, the share of coal-fired electricity generation is forecast to fall to 70.6%, while the share of renewable rises from 2.9% in 2020 to 4.2% in 2025.”

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India coal news