India is raising the share of domestic coal to more than half at power stations originally designed for imported fuel, as the world's second-largest thermal coal importer moves to cut expensive overseas purchases, according to government and industry officials.

So far this year, domestic coal has been used to operate 5.7 gigawatts (GW) of the total 18.7 GW capacity at import-based plants, they said. Trials are ongoing to extend the shift to another 4.3 GW of capacity.

These plants have traditionally relied on supplies from Indonesia, South Africa, and Russia. Imports from Indonesia and South Africa dropped about 21% and 68%, respectively, during January-April compared with the same period last year, showed data from Indian coal trader iEnergy Natural Resources.

Increased power generation from renewables has freed up local fuel supplies, enabling more domestic coal to be diverted to coastal plants built for imports. India has long sought to reduce coal imports for power generation, but previous efforts were hindered because import-based plants required higher-grade fuel and struggled with lower-quality local coal.

Operators have gradually modified units to handle larger volumes of domestic coal, which has higher ash content, one official said. Companies are now using blended fuel to optimize operations, with some facilities running on as much as 70% local coal, sources added.

"The coal ministry has offered doorstep supply to imported-coal plants, which could take care of the quality and quantity needed without any issues," another official said.

Import-based plants have already booked 16 million tonnes of domestic coal for their requirements, a third official noted.

India's coal-fired generation rose 10% in May year-on-year, the strongest growth since May 2024, as utilities ramped up output to meet power demand, Grid-India data showed.