China Coal Imports Surge While India’s Plunge Hits Markets

In August 2025, China's seaborne thermal coal imports are forecast to reach their highest level of the year, highlighting stark differences in the energy consumption patterns of two of Asia's largest economies. According to analysts, imports rose to approximately 25.6 million metric tons in August, compared with just 22.7 million tons in July. Meanwhile, India's thermal coal imports have plunged to their lowest in three and a half years a decline driven by shifting domestic energy policies and increased production. This divergence is exerting significant influence over regional commodity-linked currencies and the broader international markets.

China's renewed reliance on imported thermal coal may appear contradictory when contrasted with official data showing an overall 1.3% decrease in thermal power generation between January and July, as hydropower and renewables expanded their share. However, more granular details reveal a 4.3% rise in thermal coal-fired power generation in July compared to the same month last year. This increase is partly attributable to a drop in domestic coal production, which fell 3.8% year-on-year to its lowest point since April 2024. Sharp reductions in domestic output have led China to boost imports, which are further enticed by relatively low international coal prices.

Domestically, China continues to advance renewable energy capacities, but coal remains central to its power generation. Renewables accounted for 26% of electricity generation in April, a record high boosted by wind and solar production, yet coal still made up 54%, underscoring its ongoing significance. Furthermore, the Chinese government recently directed coal-fired plants to reduce imports while stockpiling domestic coal reserves a complex balancing act that underscores the energy security imperative.

This backdrop has had a sizeable effect on coal prices. Indonesian thermal coal, preferred by Chinese buyers for its energy content, slipped to a four-year low earlier in the year but has seen a recent rebound fueled by China's import demand. Australian coal prices have mirrored this uptrend amid growing shipments to China.

In stark contrast, India's thermal coal imports have fallen precipitously. Estimates for August point to imports dropping nearly 50% from May's peak this year, marking the lowest level since February 2023. India's declining imports coincide with a 4.2% share of electricity from coal in July  its lowest in five years as hydropower surged 22.4% and renewables grew 14.4%. India's focus on expanding domestic coal production, buoyed by new private mining entrants and government reforms, aims to reduce dependency on imports and strengthen energy sovereignty.

India's coal production is expected to hit a record 1.15 billion tons for the fiscal year starting April 2025, surpassing previous all-time highs. This domestic shift, combined with the country's increasing renewable energy rollout, signals a transformation in its energy dynamics that will reverberate through global coal markets and currency valuations.

The contrasting import trajectories of China and India offer key insights into broader economic and environmental trends. China's import surge reflects tactical moves to address domestic supply shortfalls amidst a burgeoning industrial base, while India's rapid import decline signals an emphasis on self-reliance and cleaner energy integration.

For forex markets, these developments influence the performance of commodity currencies such as the Chinese yuan and the Indian rupee. China's increased coal imports provide some support to the yuan, stabilizing its exchange rate in a turbulent period, while India's import slump contributes to rupee volatility. International investors and trade partners watch these indicators closely as proxies for economic health and resource demands in two of Asia's most influential countries.

Looking beyond the immediate, experts suggest that China’s coal consumption could peak by 2027 or 2028, as the nation accelerates renewable capacity and enforces environmental regulations. Meanwhile, India's energy landscape is evolving swiftly, aiming for a cleaner energy matrix without sacrificing growth prospects.

In conclusion, the surge in China’s thermal coal imports juxtaposed with India’s sharp decline illustrates the divergent paths these economic giants are taking in balancing energy security, environmental commitments, and economic growth. These dynamics hold significant implications for global commodity markets and currency exchanges, underscoring Asia's critical role in global energy and financial ecosystems.