The 2026 energy crises in India appears to be contained on surface for now; however, underneath the surface there is hectic movements to secure energy supplies which can keep a ~USD5Tr economy on its growth trajectory. A Q4GDP growth number of 7.2% is at stake for FY27, since the economy’s peak power usage topped all time high in April 2026 peaking at 256 GW and this figure is only expected to rise in the summer of 2026.
Severe fuel and power crunch could jeopardize this growth trajectory and push inflation higher due to rising fuel/power prices, thereby impacting country’s finances and reducing personal finance budgets on discretionary spending. This cycle could slow our economy down by over 100bps in the near term and could strain the economic growth if it persists throughout remaining 2026.
India’s Energy needs are fulfilled largely by fossil fuels; over 80% of which is imported and run our mobility infrastructure, air, rail, road traffic; apart from industries which use by-products of crude oil, for fertilizers, chemicals and allied industries. With global thrust for reducing dirty (fossil) fuels, world frowns upon these and most of the developed economies are reducing their usage. Coal being among the most polluting fossil fuel, preference for its usage is almost least in order.
India has coal and a lot of it!
India possesses abundant coal reserves, making it the 5th-largest holder globally with approximately 400.7 billion tonnes of coal resources (as of April 2025), alongside significant lignite deposits. At current consumption levels, these reserves could theoretically last 200–300+ years.
India’s domestic production crossed 1 billion tonne annual milestone FY25, led by Coal India Ltd (which accounts for 75–80% of output) and growing contributions from captive and commercial mines. We estimate the FY27 target output at over 1.25 billion tonnes and this is likely to accelerate till 2035.
Coal India Limited (CIL) is India’s largest coal producer and the world’s single largest coal mining company. CIL accounts for approximately 75-80% of India’s total domestic coal production. It operates through eight subsidiaries across 84 mining areas in eight states, employing over 220,000 people. The company primarily runs large-scale opencast mines supported by a strong infrastructure network, including first-mile connectivity projects, coal washeries, and efficient logistics systems to ensure reliable supply to power plants and industries.
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