India Looks to Boost Coal Output and Cut Imports

• India plans to increase its domestic coal production and reduce imports.
• India is currently the world's second-largest consumer of coal.
• Amid a heatwave and reduced hydropower generation, India boosted its coal consumption to a record high in the first quarter of this year.

The world’s second-largest coal consumer, India, plans to increase its domestic coal production and reduce imports, G. Kishan Reddy, Minister of Coal and Mines, said on Thursday.

Reddy, however, did not provide details about volumes, Indian media report.

Earlier this year, Rajat Handa, vice president of international trade at Agarwal Coal, told Reuters that India’s coal imports “are not going to be higher than 160 million tons” in 2024.

Many coal users that previously imported coal have started to switch to domestic supply, Handa said.  

As a result, Indian coal industry officials expect the country’s imports of thermal coal – the one used for power generation – to drop in 2024 for the first time since the start of COVID, due to rising domestic coal production and record-high levels of inventories.

In the 2023-2024 fiscal year ended March 2024, India’s total coal production rose by 11.65% to 997.25 million tons, according to data from the Ministry of Coal. So far into the 2024/2025 fiscal year, Indian coal production increased by 8.82% in April and May 2024 compared to the same period of 2023/2024, the data showed.

Amid a heatwave and reduced hydropower generation, India boosted its coal consumption to a record high in the first quarter of this year, which also drove up emissions from the power sector to an all-time high.

More coal-fired units were fired up at the start of the year in the country, amid a prolonged heatwave with above-normal temperatures which pushed electricity consumption higher. Power demand continued to rise with the expanding economic growth, too.

Utilities in India have also tried to limit the possibility of power outages ahead of the general election which was held between the middle of April and early June.

India raised the share of coal in its power generation in April as sharply lower hydropower output has threatened blackouts as summer approaches.

By Charles Kennedy for Oilprice.com

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