India's Coal Output to Reach 1.5 Billion Tonnes by 2035 as Delhi Bets on Cleaner Combustion

India's Coal Output to Reach 1.5 Billion Tonnes by 2035 as Delhi Bets on Cleaner Combustion India's coal production is rising at 10% a year and locked in through 2045, forcing the country to pursue cleaner use rather than phase-out. India's coal production has grown at around 10% annually over the past two years and is projected to reach 1.5 billion tonnes by 2035, remaining at those levels through 2045, according to Outlook Business on Sunday (2026-05-31). Coal accounts for 70% of India's electricity, and the country has 39 new coal-fired plants under construction. Those numbers make a rapid phase-out politically and economically implausible.^4,3 What India is attempting instead is a strategy of making coal less harmful rather than retiring it. The argument runs roughly as follows: the country cannot grow its economy fast enough to lift hundreds of millions out of poverty unless it keeps cheap, scalable power generation online, and no renewable buildout is yet moving fast enough to replace what coal provides.^4,3 The shift toward cleaner combustion, including scrubbers, efficiency upgrades, and eventual carbon capture, carries its own tensions. Imports of coal add pressure to India's current account, and upgrading the existing fleet to reduce local pollution requires capital that must compete with renewable investment. Both require financing at a time when global commodity supply chains are under strain.⁴ BP's start of commercial gas production from deeper reservoirs at the Azeri-Chirag-Gunashli block in Azerbaijan on Monday (2026-06-01) is a reminder of how much new supply is emerging from non-Russian sources. The non-associated gas formations at ACG hold an estimated 4 to 6 trillion cubic feet of recoverable reserves. The adjacent Babek field holds an estimated 400 billion cubic metres of gas and 80 million tonnes of condensate, and BP has flagged it as the region's next major development.⁵ BP is targeting upstream output of 250,000 barrels of oil equivalent per day in the Caspian by 2027. Azerbaijan already supplies roughly 5% of EU gas demand, and BP's expansion is likely to deepen those European flows first. Whether Caspian volumes eventually reach India through LNG or expanded pipeline networks is a longer-horizon question, but the scale of new gas reserves coming online in the region points toward an alternative that India lacks domestically.⁵ India's crude oil supply picture adds another layer. Saudi Aramco has been rerouting more than 5 million barrels per day through Red Sea terminals following Strait of Hormuz disruptions, maintaining supply to key importers. Industry estimates suggest every week of Hormuz disruption removes nearly 100 million barrels from global supply; since the conflict began in late February, the cumulative shortfall has reached nearly 1 billion barrels, according to Aramco chief Amin Nasser. India, which relies heavily on Middle Eastern crude, is directly exposed to that rerouting premium.¹ Saudi refinery capacity is beginning to normalize after a difficult few months. Saudi Arabia will import roughly 57,000 barrels per day of gasoline in June, down from 80,000 bpd in May, traders said, as Aramco restarted its Riyadh refinery following a 39-day shutdown and expects the hydrocracking unit at Ras Tanura, rated at 44,000 bpd, to return this month. Onshore storage in Saudi Arabia is near capacity after the kingdom built inventories during a period of weak global prices, shipping and trading sources said.² That surplus will redirect flows. Mediterranean gasoline suppliers, facing lower Saudi demand, are expected to push volumes toward the United States ahead of peak summer driving demand, traders said. The arbitrage will ease product market tension that had been supporting refining margins in Europe.² For India, the underlying dynamic is unchanged. Coal production targets rising toward 1.5 billion tonnes sit uncomfortably alongside net-zero commitments unless carbon capture technology scales faster than anyone currently expects. The clean-coal strategy buys time; it does not answer the emissions question. Watch whether the first funded projects for carbon capture at Indian coal plants emerge this decade — or whether the strategy stays a talking point.^4,3