India's Coal Market in 2026: Low Power Plant Stocks and What It Means for Nepal

01Why India's coal market matters to Nepal's kilns

India is short of coal where it is needed most: at its power plants. Coal stocks at Indian thermal power stations have fallen to about a week's supply, and the government is using emergency powers to keep electricity flowing.

This matters to kiln owners in Nepal for two reasons. Indian coal, bought through Coal India's e-auctions, is an important source for Nepali kilns. And much of Nepal's imported coal comes through the same Indian ports, from the same Indonesian mines, that Indian power companies are now turning to. When India's power sector is hungry for coal, everyone else in the region feels it.

Market information in this article is current as of 30 September 2026. Check the latest position before making buying decisions.

02Power plants are burning coal faster than it arrives

Stocks have fallen by about a quarter in a month. Coal held at India's thermal power plants fell to about 22 million tonnes by 26 September, down from 29 million tonnes at the end of August — roughly seven days of supply and only 37% of what plants are required to keep (Business Standard). In August, average cover was nine days, against 17 days a year earlier — the lowest since November 2023, according to Crisil (Business Standard).

Many plants are in the danger zone. Of the 190 plants monitored by the Central Electricity Authority, 82 had critically low stocks on 27 September, up from 45 at the start of the month. India's coal minister has said the country as a whole is not short of coal (Business Standard).

Why it happened:

• Demand jumped. Heat and a weak monsoon pushed up coal-fired generation. In August, power plants' coal consumption rose by about 10 million tonnes, while domestic deliveries to them rose by only 2.3 million tonnes (Business Standard / Reuters). In September, hydropower output fell about 12%, and coal had to fill the gap (Business Standard).
• The monsoon slowed mining and transport. Heavy rain flooded mines and haul roads. Coal India's daily output recovered from an average of 1.36 million tonnes in the first days of September to about 1.91 million tonnes on 8 September once the rains eased (Hellenic Shipping News / Reuters).
• Logistics, not reserves, is the bottleneck. Coal India holds about 76 million tonnes at its pitheads; the problem is getting it from mines to the plants that need it (Indian PSU, Business Standard).

03Coal India, e-auctions and imports

Power plants come first. Coal India has offered extra coal to power plants under supply agreements, including quantities above their contracted amounts, and has stepped up road and rail deliveries to them (Indian PSU). When the power sector gets priority, less coal is left for other buyers.

E-auction competition is fierce. In August, only 39% of the coal Coal India offered through e-auctions was allocated, and buyers bid well above the notified price (ThePrint / PTI). Analysts expect auction premiums to stay high in the near term (Business Standard).

Imports are climbing, mostly from Indonesia. Indian power producers imported 5.52 million tonnes of coal in August, up 85.6% on a year earlier and the highest in 15 months. About 80% of it came from Indonesia (Business Standard / Reuters). Market analysts Kpler expect Indian utilities to buy more seaborne coal from October to rebuild stocks (Kpler).

The government has stepped in. The Ministry of Power has ordered 112 captive coal-fired plants to run at maximum capacity from 1 October to 31 December and to keep adequate coal stocks (Business Standard). It is also considering whether to make power plants blend imported coal with domestic coal, though no decision has been taken (Business Standard).

04What it means for Nepali buyers

• Indian coal will be harder to win. With power plants getting priority and e-auction bidding running high, Nepali kilns relying on Indian coal should expect stiffer competition at auction.
• Imported coal faces more competition too. Indian utilities are buying more Indonesian coal at exactly the time El Niño has slowed Indonesian shipments — see Why Coal Is Harder to Get This Season. Nepal's importers are competing with them for the same cargoes.
• Port and transport congestion is possible. More coal moving through Indian ports and roads can mean longer waits for trucks and handling. Build extra time into delivery plans, especially around Dashain, Tihar and Chhath.
• Don't depend on a single source. Keeping both Indian and imported options open — for example Indonesian coal alongside Indian — gives you room to switch if one gets too tight or too slow.
• Plan the season early. The later you buy, the more you will be competing with a power sector trying to rebuild its stocks over the coming months.

05What to watch

06The bottom line

India is not running out of coal, but its power plants are, because demand has outpaced the ability to move coal from mines to plants. Until stocks recover, India's power sector will take priority at home and buy more from abroad. For Nepal's kilns, that means tighter Indian supply, more competition for imports and a strong case for planning early.