India’s coal imports dropped to 209 million tonnes in 2021-22, down from 248 million tonnes in 2019-20. The country has a well-balanced energy portfolio, and coal plays an essential role in meeting the country’s energy needs. The industry is dedicated not only to meeting the country’s coal consumption but also to preserving the environment. Coal is an important part of the industries that make electricity, fertilizer, steel and iron, and cement.
Coal imports, which peaked at 248 million tonnes (MT) in 2019-20, fell steadily over the next two years, falling to 215 MT in 2020-21 and 209 MT in 2021-22. Despite a sharp increase in overall coal demand from 956 MT in 2019-20 to 1027 MT in 2021-22, imports of coal have remained stable. Between 2009-10 and 2013-14, coal imports increased at a compound annual growth rate (CAGR) of 22.86%. At this CAGR, coal imports would also have reached 705 MT in 2020-21 and 866 MT in 2021-22. Only by maintaining a growing domestic supply over time could coal imports be limited.
The total amount of coal produced in India has increased by 61 MT, from 716 MT in 2020-21 to 777 MT in 2021-22. As a result, despite a sharp increase in actual coal demand from 906 MT in 2020-21 to 1027 MT in 2021-22, coal importation could be limited due to higher domestic dispatch, which grew from 691 MT in 2020-21 to 818 MT in 2021-22.
Domestic dispatch grew by 101 MT in 2020-21 to 104 MT in 2021-22, not just in the power industry but also in the non-power sector. The fall in coal imports in 2021-22 is mostly attributable to a decrease in imports by the power sector, which fell by nearly 40% from 45 MT in 2020-21 to 27 MT in 2021-22. When one compares coal imports by the power industry in 2021-22 to the pre-covid year of 2019-20, when such imports were 69 MT, the reduction is much more pronounced.
Despite the fact that total thermal power generation climbed to 1115 BU in 2021-22 from 1032 BU in 2020-21, a jump of 83 BU in absolute terms and over 8% in percentage terms. Coking coal imports increased by 11.65% from 2021 to 2022, reaching 57 MT. The steel industry mostly uses coking coal. However, compared to the pre-covid year of 2019-20, coking coal imports have increased by roughly 10%. Coal imports by the non-regulated sector (cement, sponge iron, and paper, for example) climbed by 5.23% to 125 MT in 2021-22 from 119 MT in 2020-21.
Imports by the non-regulated sector have actually decreased in 2021-22, compared to the pre-covid year of 2019-22, when they were 127 MT. Thus, the increase in coal imports by the non-power sector from 2021 to 2022 is largely due to an increase in coking coal imports and coal imports by the unregulated sector, which primarily imports high-grade thermal coal. Both of these types of coal are in short supply in the country.