CHENNAI, India - Coal India Ltd's sales to customers fell by more than a quarter in April, the steepest rate of decline in at least six years, it said on Friday, as a nationwide lockdown cut demand.

Offtake by customers, such as power generators, fell by 25.5% to 39.06 million tonnes - the deepest fall since at least April 2014. Data before that was not available. Production fell 10.9% to 40.38 million tonnes.

Prime Minister Narendra Modi imposed the world's most extensive lockdown from March 25 to prevent the spread of the novel coronavirus. On Friday, India extended the 40-day lockdown by another two weeks from May 4, but allowed "considerable relaxations".

State-run Coal India and the federal coal ministry have been pushing electricity generators to keep buying coal, even though utilities' stocks at mines and miners' inventories are at record high levels.

More than three quarters of the electricity generated in India is coal-fired, and Coal India accounts for more than four fifths of India's domestic production.

Power usage has fallen by more than a quarter since March 25, with demand during the current financial year seen falling for the first time in at least 36 years, according to ratings agency Moody's unit ICRA. 

Coal India officials say the company has been working on overburden removal - the process of removing top soil to expose coal seams underneath so mining can resume at full pace when restrictions are lifted.

Private power producers, many of which are debt-laden and claim they are facing a liquidity crunch, have been lobbying the federal government to postpone coal linkage auctions, during which power plants bid for supplies, and to return deposits they made to participate.

"It is inexplicable as to why auctions are being conducted so hastily, especially when the unprecedented situation due to the COVID-19 pandemic has created stress for the power producers," Ashok Khurana, Director General at the Association of Power Producers said in a letter, seen by Reuters, to the Prime Minister's office on Friday.

(Reporting by Sudarshan Varadhan; edited by Barbara Lewis) ((Sudarshan.Varadhan@thomsonreuters.com; +919810393152; Twitter: https://twitter.com/sudvaradhan @sudvaradhan;))