Coal consumption is expected to add 54 MT, while domestic production rises 13 MT during the current calendar year
India’s coal production is projected to increase by 1.2 per cent, or 13 million metric tonnes (MT), to a record 1,090 MT in calendar year 2026, according to the World Bank’s October 2026 Commodity Markets Outlook.
The increase comes amid rising domestic coal consumption, which is expected to grow by 4.2 per cent, or 54 MT, to 1,350 MT during the year. Strong electricity demand, solid growth in industrial and services activity, and weaker hydropower generation due to heatwaves are expected to drive higher consumption.
India’s production growth is also expected to partly offset declining output among major coal-producing economies, including China, Indonesia, Australia and the United States, the report said.
The World Bank attributed India’s higher coal consumption to solid growth in industrial and services activity, alongside strong power demand. Weak hydropower output due to heatwaves is also expected to increase reliance on coal during the year.
India is among the key contributors to the projected 1.2 per cent increase in global coal consumption in 2026. The rise in global demand is equivalent to 103 MT, with China and India accounting for much of the increase. India’s coal consumption is projected to reach 1,350 MT, while China’s demand is expected to rise by 1 per cent, or 46 MT, to approximately 5,000 MT.
Domestic Production Outlook
India’s coal output is expected to reach an annual record of 1,090 MT, with the projected 13 MT increase partly offsetting production declines in other major coal-producing countries.
The World Bank expects global coal production to decline by 0.7 per cent, or 66 MT, in 2026. China is projected to record a 1.9 per cent decline, equivalent to 91 MT, while Indonesia’s production is expected to fall by 1.5 per cent, or 12 MT. The report also projects a contraction of around 3 per cent in US coal production, equivalent to 15 MT. Lower Australian supply, reflecting weather-related export disruptions, is expected to add to the decline.
India is expected to remain among the principal sources of global coal demand growth in 2027, alongside ASEAN economies, supported by rising electricity consumption and industrial activity.
The World Bank projects global coal consumption to decline by 0.4 per cent to approximately 8,900 MT in 2027, mainly due to lower demand in Europe. However, India and Southeast Asian economies are expected to support demand.
Global coal production is projected to increase by around 26 MT, or 0.3 per cent, in 2027, driven by higher output in China and India. India’s coal imports are expected to remain broadly stable during the year, according to the report.
Coal Prices And Risks
Australian thermal coal prices are projected to average USD 135 per metric tonne in 2026, 25 per cent above their 2025 level. Prices are expected to decline by 4 per cent in each of the following two years as liquefied natural gas supplies recover and renewable energy generation expands.
However, the World Bank identified extreme weather conditions as an upside risk to coal prices. Prolonged heatwaves could increase cooling demand in India and other Asian economies, while droughts or weak wind generation could reduce hydropower and wind output, increasing dependence on coal-fired electricity generation.
