Domestic Coal Production Shielding Indian Economy From Global Energy Price Volatility: Coal Secretary

NEW DELHI — Domestic coal production is acting as a crucial buffer, shielding the Indian economy from severe global price swings amid ongoing pressures on the energy sector, according to Coal Secretary Vikram Dev Dutt.

Speaking at a stakeholder consultation titled 'Mining for Future' in Panjim, Goa, Dutt noted that the energy sector has faced significant testing over the past eight months. When conflicts in West Asia disrupted liquefied natural gas (LNG) and liquefied petroleum gas (LPG) supplies starting in late February, existing coal stocks at mines and power plants enabled the government to maintain a steady power supply across the country.

Despite managing the recent disruptions, the Coal Secretary cautioned that pressure on global energy markets has not eased. Citing projections from the International Energy Agency (IEA), Dutt pointed out that gas markets are expected to remain tight through 2027. He noted that Asian spot LNG averaged USD 17.5 per MBtu in the second quarter, marking a 45 per cent increase compared to the previous year. Furthermore, global coal demand is forecast to reach a record 8.94 billion tonnes in 2026, making domestic production a vital protective measure for the economy.

Domestic consumption trends reflect a similar trajectory of sustained growth. According to projections by NITI Aayog, India's coal demand is expected to rise from approximately 1.25 billion tonnes in 2025 to over 2.6 billion tonnes by 2050 under current policies. Even under a net-zero pathway, demand is projected to remain above 1.8 billion tonnes, driven by expansion in the country's three largest coal-consuming sectors: steel, cement, and power.

India's domestic output reached 1,041 million tonnes in the 2025-26 period, with coal continuing to account for more than 70 per cent of the nation's electricity generation.

Addressing the broader responsibilities of the sector, Dutt emphasized that the Coal Ministry's commitments extend beyond output volumes to include sustainability, community welfare, and technological advancement. He stressed the importance of scientific mine closure, highlighting the need to transform mined-out areas into co-created habitats that support ecological restoration, community well-being, and long-term social stability.

"The current global energy landscape demonstrates the critical importance of supply chain resilience for industrial growth. With sectors like steel, cement, and power depending heavily on steady energy inputs, domestic production serves as a vital safeguard against international market volatility. For businesses and entrepreneurs operating in energy-intensive sectors, understanding these macro-level supply trends is essential for long-term operational planning and risk management." — Dr. Shishir Gupta, Founder & CEO, StartupLanes