An Unprecedented Expansion
Recent data reveals a significant acceleration in India’s coal ambitions. According to Global Energy Monitor, proposed new coal mining capacity in India nearly doubled in 2025, driven largely by projects in the eastern states of Jharkhand and Odisha.
The government has set an ambitious target to produce approximately 1.15 billion tonnes of coal in the 2025-2026 fiscal year, a substantial increase aimed at bolstering domestic supply. This move is part of a broader strategy to commission as many as 100 new mines by 2030 to secure the country’s energy future. This expansion stands in stark contrast to the global picture, where the pace of new mine openings has generally been decreasing.
The Drive for Energy Security
At the heart of India's coal strategy is a pressing need for energy security. Coal is the backbone of India’s power system, generating over 70% of its electricity and meeting around 55% of its primary energy needs. For a rapidly growing economy with soaring electricity demand—fueled by industrial growth and more frequent, intense heatwaves—a reliable power source is non-negotiable. Government officials see a robust domestic coal supply as a crucial buffer against the volatility of global energy markets and disruptions in imported fuels like liquefied natural gas (LNG). By ramping up domestic production, India aims to reduce its reliance on imports and ensure a stable, affordable power supply to keep its economic engine running.
Economic Growth and Self-Reliance
Beyond just keeping the lights on, the coal expansion is deeply tied to India’s economic aspirations. The sector provides a significant number of jobs, with hundreds of thousands of people directly employed in coal mining. Furthermore, a steady supply of coal is vital for heavy industries like steel and cement, which are essential for infrastructure development. The push for coal is also a strategic move towards self-reliance, or ‘Atmanirbhar Bharat’. By leveraging its vast domestic coal reserves, the third-largest in the world, India can reduce its foreign exchange expenditure on energy imports. This focus on domestic resources is seen as a more dependable path to powering the nation's development compared to relying on expensive and geopolitically sensitive international supply chains.
The Environmental and Financial Risks
However, this commitment to coal is not without significant risks. Environmentally, coal mining and combustion are major sources of pollution and public health issues. The process contributes to deforestation, soil degradation, and water contamination, with communities near mines often facing severe health hazards. Financially, there is a growing concern about “stranded assets.” As renewable energy becomes increasingly cost-competitive and the global economy moves towards decarbonisation, these massive investments in new coal mines and power plants risk becoming economically unviable before the end of their lifespan. This could leave a legacy of financial burden on the government and public sector banks, even as the country simultaneously pursues ambitious renewable energy targets.
