India's Thermal Coal Imports Fall for Second Straight Year

India's thermal coal imports are expected to decline for the second consecutive year, driven by increased domestic production and government initiatives aimed at bolstering energy security. According to the Ministry of Coal, coal imports during April-October 2024 decreased by 3.1% compared to the same period last year, reaching 149.39 million tonnes (MT). This reduction in imports has saved the country around $3.91 billion.



The decline in coal imports is attributed to the increase in domestic coal production, which reached 537.57 MT during the same period, marking a growth of 6.04%. This upward trend in domestic production reflects the government's ongoing efforts to streamline coal usage and enhance energy security. The proactive measures taken by the government to increase domestic coal output will ultimately reduce dependence on imports and contribute to the overall sustainability of India's energy landscape.

However, the sustainability of this trend is uncertain due to quality issues, scarcity of high calorific value coal, and transportation challenges. Indian coal has high ash content (35%-45%) compared to imported coal (6%-20%), making it less suitable for certain applications. This quality gap may necessitate continued imports to meet specific requirements. Additionally, the scarcity of high calorific value coal in India may require continued imports to meet the demand for high-quality coal. Despite increased domestic production, supply to coastal power plants and end-users in the south and parts of the west often remains a challenge due to transportation hurdles. This may necessitate continued imports to meet coastal demand.

In conclusion, while India has made progress in reducing thermal coal imports through increased domestic production and government initiatives, the sustainability of this trend is uncertain due to quality issues, scarcity of high calorific value coal, and transportation challenges. The government's efforts to increase domestic coal output and reduce dependence on imports are crucial for India's energy security, as coal continues to be an indispensable energy source, contributing to 55% of the national energy mix.