Higher blending ratios introduce efficiency losses, increased maintenance, and require meaningful capital investment.  | Photo Credit: RAO GN

India’s dependence on better quality thermal coal imports to remain firm in the range of 175-190 million tonne by 2030, supported by roughly 50 million tonne of demand from import-dependent coal-based power plants.

The import coal dependent power facilities are engineered to run on high-calorific, low-ash imported coal and face significant technical challenges in switching to domestic supply, which has much higher ash content and different combustion properties.

Pritish Raj, Senior Manager, APAC & EMEA Thermal coal said even without direct disruption, coal has been pulled into this broader price cycle and has entered into yet another year of record-high global coal consumption in 2026, with limited downside risk even if growth moderates.

While policymakers in India are targeting a reduction in imports, particularly with plans to substitute up to 20 per cent through domestic coal blending in import-based capacity, this transition will be gradual and extend toward the end of the decade, with import reliance structurally intact at least through 2030, he added.

Higher blending ratios introduce efficiency losses, increased maintenance, and require meaningful capital investment. Hence, coal continues to serve as a reliable and cost-effective cornerstone of India’s energy system, particularly in an increasingly uncertain global environment.

Some flexibility exists, particularly among industrial users such as cement and sponge iron producers, who may adjust fuel specifications and optimise blends, he said.

While these consumers may incrementally increase the use of domestic coal, their ability to fully substitute imported material remains constrained by efficiency considerations and process requirements. Therefore, even in the non-power segment, imported coal demand is likely to see only gradual and limited displacement, said Raj.

Power demand to zoom

On the sharp increase in power demand, S&P Global said the global data centre sector is experiencing explosive growth, with power demand projected to increase 18 per cent annually over 2025–30. This surge could add an incremental 1,000 TWh to 1,500 TWh by 2030 -- equivalent to the total current power consumption of Japan or India.

Jenny Yang, Global Head of Power and Renewables Research at S&P Global Energy said the demand for power from data centres in India is expected to grow over 25 per cent annually.

This makes it a strategic driver for incremental power demand and digital infrastructure, with gigawatt-scale data centre clusters being planned.

India’s strong domestic demand and relatively lower baseline capacity offer significant headroom for rapid expansion. Geopolitical disruptions such as West Asia reinforces the importance of geographic diversification in cloud architectures, creating incremental demand for secondary, disaster-recovery and overflow capacity for which India is increasingly considered a viable location, she said.

India is thus well-positioned to capture a meaningful share of global data centre growth, particularly for AI workloads, redundancy capacity and cross-border cloud infrastructure.

However, India’s ability to capitalize on this demand critically depends on power infrastructure readiness, she added.

Published on June 18, 2026