India Wants BTA. But For That, It May Have To Import US Coal

But why should India import coal, and that too, from the US? Well, that's the hidden story — one of excess US reserves, India's coal dependence for power generation, and the give-and-take of a trade deal.

American Natural Gas Production Up, Coal Down

There has been a significant rise in natural gas production in the US. Production hit a record high of 37.8 trillion cubic feet (Tcf), a 4.3 per cent jump from the previous year.

Lydia Powell, a non-renewable energy expert and Distinguished Fellow of Observer Research Foundation (ORF), said, “The American domestic economy uses its natural gas mainly for electricity generation and heating, apart from usages in industrial processes, including chemical production. Whatever amount of natural gas the USA consumes is now almost entirely produced within the country.”

In contrast, American coal production is going down.  The year-on-year growth in coal production in the country fell by 2.7 per cent in 2023 to 577.9 million short tonnes (MMst).

The noteworthy point here is that the number of operating coal mines increased from 548 to 560 in the same year. Most importantly, the USA is home to the largest recoverable coal reserve in the world, with an estimated 249.8 billion short tonnes.

So, while the American economy is managing its need for electricity generation and heating from rising natural gas production, coal production is dwindling.

No wonder, the country will try to mine its coal reserves and export to other countries. In this perspective, the ongoing India-US bilateral trade agreement will be an opportunity for the Trump administration to push for more coal exports to India.

“The USA will keep on meeting its domestic demand for power generation and heating by domestic natural gas production. President Trump would like to increase coal production, as that can translate into more economic activities and employment. There is a possibility that the US may push for more coal exports to India in the ongoing BTA negotiation,” said Powell.

India Strives To Reduce Coal Imports Dependence

India’s coal production, on the other hand, rose by almost 5 per cent in 2024-25. The production touched 1,047.57 MT (million tonnes) in the previous financial year, compared to 997.83 MT in 2023-24.

The rise in coal production continues even in 2025-26. India’s coal production from captive and commercial mines in the April-June quarter of 2025-26 witnessed 16.39 per cent growth.

With summer at its peak and power demand at its highest, coal remains India’s primary source for electricity generation. Important to note here, India has been consciously trying to reduce its dependence on coal imports over the years.

Import dependence has steadily declined to around 21 per cent in 2023-24 from 26 per cent in 2014-15. India balances its rising coal production with its overall Net Zero target by directing the coal and lignite PSUs to offset carbon emissions from increased coal production by creating fresh renewable facilities.

Coal India Limited (CIL), NLC India Limited (NLCIL), and Singareni Collieries Company Limited (SCCL) — all of these have set their Net Zero targets. CIL and SCCL had earlier planned to achieve Net Zero by capacity in 2026 and 2025, respectively.

In fact, the NLCIL has already achieved its Net Zero target by capacity. The carbon emissions of existing production are already offset by the creation of renewable solar and wind energy facilities.

US May Pressurise To Send More Coal To India

With the investment in renewables visibly going down in the USA under President Trump, there will be an uptick in fossil-based energy production in the country. That’s for sure.

Trump will also try to utilise America’s huge coal reserves. However, the US domestic economy does not need all that coal. So, the American coal would need to be exported elsewhere.

Powell said, “India’s coal consumption is the second-largest in the world, after China. While China’s coal consumption in power generation has come down substantially in the last decade or so, India’s coal consumption in power generation remains stable at approximately 73 per cent to 79 per cent in the same period.”

“The US negotiation team may try to press for tariff cuts in the BTA negotiation. Given India’s endeavour to reduce coal import dependence, the Indian negotiation team should anticipate and counter these efforts,” said Powell.