Coal shipments to India declined 7% year-on-year between January and October 2026, primarily due to rising import costs, according to BIMCO. However, a recovery in import demand may be on the horizon as critically low coal inventories at power plants increase pressure to secure supplies.
Filipe Gouveia, Shipping Analysis Manager at BIMCO, said thermal coal demand remained strong, particularly from the power sector, while domestic coal production failed to keep pace with consumption. In contrast, growth in coking coal demand eased following a decline in steel production amid weak margins.
The cost of imported coal has increased due to the weakening Indian rupee and higher international coal prices. Global coal prices have firmed amid increased demand following disruptions in the Strait of Hormuz, which tightened LNG supplies and prompted the EU, Japan and South Korea to increase coal-based electricity generation. Higher Chinese imports following mining accidents and temporary mine closures also contributed to the price rise.
India’s coal-fired electricity generation increased by approximately 9% year-on-year this year. Although solar and wind power generation also expanded, lower hydroelectric generation due to a weaker monsoon linked to El Niño conditions limited the impact on coal demand.
Domestic coal production grew by only around 4% year-on-year, with inventory drawdowns helping bridge the supply gap. As of November 1, 48% of India’s coal-fired power plants had critically low coal inventories.
India, the world’s second-largest coal importer, accounts for approximately 17% of global coal shipments. The decline in Indian imports has therefore weighed on the wider coal shipping market, particularly the Supramax segment.
According to BIMCO, Supramax coal shipments to India fell 16% year-on-year, while Panamax shipments declined by a comparatively smaller 4%, reflecting increased competition among vessel segments for coal cargoes.
However, after several months of subdued activity, Indian coal import demand showed signs of recovery in October, with shipments increasing 7% year-on-year. Critically low inventories and concerns over adequate coal supplies for power generation are likely to have encouraged fresh purchases.
Looking ahead, high electricity demand and the need to replenish depleted inventories could support coal imports over the coming months. Nevertheless, the International Energy Agency expects India’s coal demand to grow by only 2.5% in 2027. Improved hydroelectric generation and rising domestic coal production could moderate the growth in import requirements.
BIMCO expects Indian coal imports to increase only slightly, as expanding domestic mining capacity may limit the country’s dependence on overseas supplies.