Fretting fatigue pertains to the behaviour of engineering components undergoing cyclic loading while in contact with each other. This intricate contact-related phenomenon often results in premature failure compared to conventional fatigue issues. Moreover, when these components operate in high-temperature atmospheres and experience high wear conditions, such as the heat transfer tubes in the nuclear reactor, the application of Functionally Graded Material (FGM) coatings becomes essential. Consequently, it is imperative to investigate how FGM coatings influence the initiation and propagation behaviour of fretting fatigue cracks. This paper employs the Critical Plane (CP) method to calculate the damage parameter. Additionally, Linear Elastic Fracture Mechanics (LEFM), specifically the Extended Maximum Tangential Stress (E-MTS) criterion, is utilized to examine how FGM coatings affect the paths of fatigue crack propagation in the presence of fretting conditions. Meanwhile, due to the unavailability of material properties of FGM coatings, the damage parameter and stress intensity factors are utilized to indirectly assess the effect of FGM coatings on crack initiation and propagation lifetimes. The FGM coating significantly influences tangential stress, thereby affecting the length of the stick zone, while having minimal impact on the distribution of normal stress along the contact surface. Furthermore, it is observed that adjusting the variation in composition of FGM coatings and the elastic modulus of the first FGM coating layer provides a potential technique for enhancing both crack initiation and propagation lifetimes.