India’s coal production and despatch declined for the second consecutive month in July 2025 as monsoon rains impacted mobility.

According to the latest numbers from the Coal Ministry, production declined by more than 12 per cent Y-o-Y to 64.86 million tonnes (mt) last month. On a monthly basis, the output fell by almost 18 per cent.

Production from Coal India (CIL) declined by almost 16 per cent Y-o-Y to 46.44 mt. On a M-o-M basis, the mining behemoth’s output declined by roughly 20 per cent.

Pan-India coal despatch during July 2025 declined by 9 per cent Y-o-Y and around 13 per cent M-o-M to 73.57 mt. Coal offtake by CIL fell by 10 per cent Y-o-Y and 11 per cent M-o-M to 54.25 mt.

The power sector accounted for 80 per cent of the coal despatched pan-India, followed by captive power producers (9 per cent).

Historically, coal mining operations enter the slow lane during the four-month monsoon season. They pick up from October to March in line with festival, marriage and travel season.

The monsoon months are characterised by lower consumption of electricity, which reflects in lower demand for coal and, hence, lower supplies.

During July 2025, India’s coal-based power generation declined by almost 4 per cent Y-o-Y and 1.12 per cent M-o-M. On the other hand, generation from renewable energy sources (RES) rose by about 14 per cent Y-o-Y and 0.7 per cent M-o-M during July.

Similarly, hydro power generation also rose by 22 per cent Y-o-Y and 29 per cent M-o-M in July 2025.

A decline in demand is also reflected in lower railway rakes for transporting the critical resource. Rake movement during July 2025 stood at 270 rakes per day, compared to 305.1 rakes per day in June 2025 and 301.5 in July 2024.

Higher production

Rising production in India is expected to “significantly” outpace the demand for thermal coal in the current calendar year, pulling down imports, says the International Energy Agency (IEA).

Its mid-year update on coal projected that the world’s second largest coal producer and consumer is likely to produce 1.11 billion tonnes (bt) in 2025, and 1.15 bt a year later. During both the years, the annual rate of production growth is expected at 3 per cent.

“In India, the continued expansion of domestic thermal coal production is expected to significantly outpace demand growth in 2025. As a result, India’s reliance on thermal coal imports is projected to decline to just over 150 mt,” it said.

It anticipates that the expected oversupply in 2025 will weigh on global coal import demand. India’s imports are set to decrease to around 219 mt, as domestic production continues to expand and displace imported volumes.