Imports by utilities, which account for over three-fourths of India's coal use, fell 41%, the government data showed, as coal's share in overall power generation dropped to as low as 60% during the quarter, compared with 2019 average of nearly 70%.
Thermal coal imports by the "non-regulated" sector, which includes cement producers and the metals industry fell 41.7%, the coal ministry data showed.
Lower coal imports is good news for the Indian government, which has been looking to cut down imports of the fuel.
But fewer shipments by India - the world's second largest consumer, importer and producer of the fuel - will hit miners such as Indonesia's Adaro Energy and traders such as India's Adani Enterprises and London-listed Glencore Plc.
Imports of coking coal - used mainly by the steel industry - also fell 28.6% to 9.71 million tonnes, government data showed.
Coal-fired electricity showed signs of recovery during the first half of September, driven by higher demand in India's industrial western states.