India is the second-largest consumer of coal globally and possesses the fifth-largest coal reserves. However, the country still faces a shortfall in coking coal and high-grade thermal coal, both critical for industries like steel production.

India’s coal imports for blending purposes in power generation have decreased by 8.5 per cent during the first half of fiscal year 2024-25 (April to September), reflecting the country’s ongoing efforts to reduce its reliance on imported coal. According to data from the Directorate General of Commercial Intelligence and Statistics (DGCIS), coal imports for blending purposes fell to 9.79 million tonnes (MT) from 10.70 MT during the same period last year.

Despite this decline, India’s overall coal import figures for the April-August 2024 period showed a marginal increase of 2.2 per cent, reaching 111.20 MT compared to 108.81 MT in the previous year. The non-regulated sector, however, faced a significant drop of 10.3 per cent in imports during this period, indicating a shift in consumption patterns and an effort to curtail reliance on external sources of coal.

The reduction in coal imports for blending purposes aligns with India’s strategic push to boost domestic coal production and achieve greater self-sufficiency. In particular, the country has made strides in increasing the availability of domestic coal, which remains crucial for power generation, steel production, and other heavy industries. The decline in blending coal imports occurred despite a 4.97 per cent increase in coal-based power generation from April to September 2024, underscoring the country’s growing energy capacity.

Notable Increase in Output

India is the second-largest consumer of coal globally and possesses the fifth-largest coal reserves. However, the country still faces a shortfall in coking coal and high-grade thermal coal, both critical for industries like steel production. These factors continue to drive the need for coal imports, particularly in specialized sectors such as power generation by imported coal-based power plants.

“Coal imports have been primarily driven by imported coal-based power plants, which are designed to utilize only imported coal. These plants imported 26.14 MT of coal during the April-September period, reflecting a significant 53.1 per cent increase from 17.07 MT last year,” said an industry source.

The uptick in coal imports by these power plants contrasts with the general decline in blending coal imports, suggesting that while certain sectors still rely on external coal sources, others are making progress in utilizing more domestic coal.

In terms of coal production, India has witnessed a notable increase in output during the same period. Domestic coal production reached 453 MT in April-September 2024, up from 428.21 MT in the corresponding period last year, marking a growth of 5.79 per cent. This increase reflects the government’s concerted efforts to streamline coal mining operations and boost output from domestic sources.

Moreover, despite the increase in import volumes, the cost of imported coal has decreased significantly. The total value of coal imports during April-August 2024-25 amounted to ₹120,532.21 crore, compared to ₹133,461.65 crore during the same period last year. This reduction in value, amounting to savings of ₹12,929.44 crore, is largely attributed to lower global coal prices, which have provided some relief to India’s import bill.

“While we have made significant strides in reducing coal imports, the government continues to focus on strengthening domestic coal production to safeguard energy security and reduce foreign exchange dependency,” said a Ministry of Coal official.

Scheme for Coal Gasification

A press release from the ministry of coal said that the government is also working on longer-term strategies to diversify the energy mix and enhance the sustainability of coal-based energy generation. In parallel, India is pursuing coal gasification initiatives, a cleaner alternative to traditional coal usage, as part of its broader climate action goals.

In another related development, the Ministry of Coal has received strong industry participation for its Financial Incentive Scheme aimed at promoting coal gasification projects. The scheme, with a budget of ₹8,500 crore, is a key component of India’s energy transition strategy, aiming for 100 million tonnes (MT) of coal gasification by 2030. The Ministry has already received five submissions for the first round of proposals, reflecting growing interest from public sector undertakings (PSUs) and private players in clean coal technologies.

Vismita Tej, Additional Secretary of the Ministry of Coal, emphasized the importance of coal gasification in India’s transition to a sustainable energy future. “The participation in the scheme shows the industry’s increasing enthusiasm for investing in cleaner, more efficient technologies,” she said.

The Ministry is also working to expand participation in the scheme, with an extended deadline for submissions from private companies set for January 10, 2025. As India continues to balance its coal consumption needs with climate and sustainability goals, the developments in both coal production and gasification mark significant steps in the country’s energy journey.