India aims to triple coal stockpiles to 55 million tons by March
India's coal, power and railway ministries are coordinating to raise coal reserves from 18 million tons to 55 million tons by the end of the fiscal year on March 31, to avert summer power shortages.
Current stockpiles cover just six days of coal-fired power generation, well short of the government’s three-week buffer requirement, and are at their lowest level since 2021. At some plants, inventories have dropped to critically low levels.
Last month, roughly half of India’s coal-fired power plants reported critically low stocks. Supply had already tightened in August, when monsoon rains disrupted domestic coal transport from producing regions to power stations.
To close the gap, Indian Railways is expanding its hauling capacity for coal shipments, which rose 20% last month. Authorities are now pushing for a further 7% increase in rail capacity by March.
Demand pressure is also building. The International Energy Agency, in its Coal Mid-Year Update 2026, projected India’s total coal demand will climb 4.2% this year to 1.353 billion tons, reversing a slight decline the previous year. Rising power consumption and disruptions to oil and gas flows through the Strait of Hormuz are cited as contributing factors. India continues to expand solar capacity, but officials note that variable renewable output cannot yet meet baseload demand for the world’s second-most populous country.
Why it matters for markets: A sharp rise in Indian coal demand and stockpiling supports thermal coal and freight rail investment, while tight coal supply and reliance on fossil-fuel baseload generation keep India exposed to energy security risks tied to Strait of Hormuz disruptions, which can also affect global oil and gas prices.
Source: OilPrice.com