Central Idea

• India’s coal imports increased by 30% to 162.46 million tonnes in the 2022-23 financial year compared to 124.99 MT in the previous year, according to a report.
• The report was released by mjunction, a B2B e-commerce platform that is a joint venture between Steel Authority of India (SAIL) and Tata Steel.

India’s coal production and consumption

• India is among the top five coal-producing countries in the world.
• Despite being a major producer, India also imports coal to meet some of its demand.
• India is a significant consumer of coal, which is used for power generation and industrial processes.

Import of Coking Coal

• Coking Coal: The import of coking coal rose by 5.44% to 54.46 MT over 51.65 MT in FY22, as per the report by mjunction. Coking coal is a key raw material used in steel making.
• Non-coking coal: In March 2023, non-coking coal import stood at 13.88 MT against 12.61 MT in the same month last year.
• Other imports: The total imports of various types of coal like anthracite, pulverised coal injection (PCI coal), met coke and pet coke, along with coking and non-coking coal, were at 249.06 MT in FY23, up from 200.71 MT in FY22, a rise of over 24%.

Key inferences from this

• The high demand for steam coal in India and the weakening of seaborne prices led to increased volumes during March.
• This trend might continue in the coming months due to above-normal average temperatures expected during the summer.

Why does India import coal?

India imports coal primarily due to the following reasons:

• Lack of good quality coal: India’s domestic coal reserves have limitations in terms of quality, and the country does not have sufficient reserves of good quality coking coal, which is used in steelmaking and allied industries. Therefore, India imports coal to compensate for the lack of good quality coal.
• Growing energy demand: India’s energy demand is continuously increasing due to population growth and rapid urbanization. Coal is a significant contributor to India’s energy mix, and the country needs to import coal to meet its growing energy demand.
• Infrastructure constraints: India’s domestic coal production is limited due to various factors such as geological constraints, land acquisition issues, and environmental regulations. Moreover, India’s domestic coal transport infrastructure is insufficient, and many power plants are located far away from the coal mines, making imports a more viable option.
• Better quality and cost-effectiveness: Importing coal from other countries can sometimes be more cost-effective than producing it domestically, especially when the quality of imported coal is better than domestic coal.

Try this PYQ from CSP 2012:

Despite having large reserves of coal, why does India import millions of tonnes of coal?

1. It is the policy of India to save its own coal reserves for the future, and import them from other countries for the present use.
2. Most of the power plants in India are coal-based and they are not able to get sufficient supplies of coal from within the country.
3. Steel companies need a large quantity of coking coal which has to be imported.

Which of the statements given above is/are correct?       

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

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