India’s coal production and despatch declined for the second consecutive month in October this year largely in line with lower demand for the dry fuel from the Power sector, which also reflected in lower electricity consumption.
According to the Coal Ministry, the pan-India production fell by 8.5 per cent Y-o-Y to 77.43 million tonnes (mt) in October 2025 on a provisional basis. Despatch also declined by almost 5 per cent Y-o-Y to 80.44 mt.
The IIP numbers for last month also share a similar picture. Coal production (weight: 10.33 per cent) declined by 8.5 per cent Y-o-Y in October 2025. Its cumulative index declined by 2 per cent Y-o-Y during April-October FY26.
Pan-India lignite production also declined back-to-back for two months ending October 2025. While production fell by a little over 1 per cent to 3.04 mt last month, despatch of the commodity rose by 1.34 per cent to 3.40 mt.
India’s energy consumption hit 132 billion units (BUs) in October 2025 declining by 6 per cent Y-o-Y.
Coal power generation was lower on an annual basis in October 2025 and April-October 2025 at 93.61 BU and 718.02 BU, respectively, against 108.76 BU and 760.50 BU in October 2024 and April-October 2024, respectively. Coal accounted for 67.21 per cent of India’s total power generation, up from around 63 per cent in September 2025.
Lower demand for coal also led to a fall in requirement for railway rakes. The loading of rakes fell by 3.47 per cent Y-o-Y to 289.6 rakes per day. For the Power sector, the requirement declined by 5.49 per cent Y-o-Y to 254.8 rakes per day.
Lower demand for electricity also reflected in lower prices on power exchanges. For instance, Indian Energy Exchange (IEX) said that enhanced hydro, wind, and solar generation, combined with steady supply from coal-based generation resulted in higher supply liquidity on the exchange platform, leading to a decline in DAM and RTM prices.
The market clearing Price in the Day Ahead Market (DAM) at ₹2.67 per unit during October 2025, a fall of 32 per cent on an annual basis. Similarly, price in the Real Time Market (RTM) fell by almost 28 per cent Y-o-Y to Rs 2.73 per unit.
Interestingly, the production and despatch of coal had also declined for two consecutive months in June and July 2025 as monsoon rains impacted mining activity. The monsoon months are characterised by lower consumption of electricity, which reflects in lower demand for coal and hereby lower supplies are required.
Historically, coal and mining operations enter the slow lane during the four-month monsoon season. They pick up from October to March in line with festival, marriage season and travel season.
However, the year 2025 has been an outlier in terms of India’s power consumption declining from May onwards as early rains cooled temperatures, unlike 2024 when the country’s peak power demand rose to 250 gigawatts (May 2024), an all time high record.
In order to meet future demand of coal through indigenous sources and to reduce non-essential import of coal, domestic coal production is expected to grow by 6-7 per cent annually in the next few coming years to reach about 1.5 billion tonnes by FY30.
The all-India domestic coal production rose by around 5 per cent Y-o-Y to 1,047.67 mt in FY25 against 997.83 mt in FY24.
