India’s electricity system runs on coal and rail

The competitive structure of UPI is beginning to shift at the margin. The combined share of the top two apps has declined from roughly 84% in mid-2025 to 81.4% by February 2026, continuing a gradual erosion from the post-Paytm peak (see chart 1). The Reserve Bank of India’s action on Paytm Payments Bank in early 2024 temporarily pushed volumes toward the two dominant platforms, lifting their combined share to 87.4% by August 2024. PhonePe—which has filed its IPO papers—remains the dominant player in the ecosystem. 

The combined share of the top two apps has declined to 81.4% by February 2026

The shift, however, is occurring at the margins. Data from Thurro’s platform shows that Navi has emerged as the primary beneficiary, growing from 2.3% to 3.3% share over the same period. 

The divergence between volume and value is also visible at the app level. PhonePe’s share of total value stands at 50% and exceeds its volume share, indicating a skew toward higher-ticket transactions, while Google Pay remains broadly aligned across both metrics.   

UPI continues to grow in scale  

Coal despatch has lagged production, creating a persistent gap between output and usable supply 

Notably, despatch remains relatively stable even during monsoon months, when production typically softens, reflecting the system’s ability to smooth seasonal supply fluctuations. However, due to the lag between output and usable supply, incremental production is not fully translating into coal available at the plant level.  

The effect is visible in plant-level inventory patterns. Aggregate coal stocks at thermal power plants have remained around 18–20 days of consumption over the last 12 months. However, this headline number masks sharp regional disparities. Plants linked to rail-sea routes and coastal supply chains continue to report lower inventory cover, reflecting uneven distribution. 

This is where recent tighter inventory positions at ports such as those operated by Adani and other coastal handling facilities need to be interpreted carefully (see Chart 3). In many cases, lower inventory reflects operational choices and not supply stress, particularly among private operators that run leaner, just-in-time systems. These patterns reflect frictions in the logistics chain—particularly in the movement of coal from pithead mines in eastern and central India, through rail corridors, to coastal ports and onward to end-users.  

Frictions in the supply chain have constrained the flow of coal 

A large share of coal supply to power plants—nearly 50,000 tons of daily inventory—is routed through rail and pithead linkages, both largely insulated from crude price movements. Road-based transport accounts for only a small share, limiting the system’s exposure to diesel-driven cost volatility. 

Plants dependent on longer-distance coal movement—whether coastal or inland—are more exposed to these disruptions. Congestion in key rail corridors, combined with limited rake availability and long turnaround times, continues to constrain coal flows. 

The railway system remains the central backbone of coal evacuation, providing consistent despatch even as production fluctuates. However, capacity constraints in high-density corridors limit how quickly incremental production can be absorbed. In several high-density corridors, rake cycle times—the time taken for a rake to be loaded, transported, unloaded, and returned for reuse—have stretched significantly, with mines waiting multiple days—sometimes weeks—for allocation (see Chart 4).  

In several high-density corridors, rake cycle times have stretched significantly 

This effectively caps the amount of coal that can be delivered to power plants, regardless of how much is produced at the source. This means that localised supply tightness can emerge even when overall coal availability remains adequate.  

This also explains the persistence of periodic “shortage” narratives despite improving headline metrics. Coastal plants, which rely on blended supply chains involving rail and port handling, are particularly exposed to these disruptions. 

Policy responses are increasingly focused on addressing this bottleneck. Investments in railway capacity, dedicated freight corridors for coal, and first-mile connectivity projects aim to reduce loading times and improve evacuation efficiency.  

Unlike oil-dependent systems, India’s electricity sector remains insulated from crude shocks. The constraint is internal: logistics, not fuel availability. 

A more detailed version of this analysis, including underlying datasets and extended breakdowns, is available to clients on request. For access, please write to contact@thurro.com.   

Cover photo credit: AI generated image

View disclaimer