India’s coking coal imports are projected to rise to 135 million mt by 2030 as the country pushes to meet its ambitious domestic steelmaking target of 300 million mt, according to a new report published by Ernst & Young-Parthenon.
Steelmaking to remain the key driver of coking coal demand
The report highlighted that the steel industry, which consumes about 95 percent of India’s coking coal, will continue to be the primary driver of demand. Currently, India imports nearly 90 percent of its coking coal, with Australia as the main supplier, followed by the United States, Canada, and Russia.
To reduce dependence on imports, the government aims to raise domestic raw coal production from 66.8 million mt in 2023-24 to 140 million mt by 2029-30. This includes 105 million mt from state-run Coal India Limited and 35 million mt from private mines.
Policy measures and diversification of supply
The government’s plan also seeks to increase washed coal capacity to 15 million mt. Key policy measures include allowing 100 percent foreign direct investment in mining, revenue-sharing auctions, and capital subsidies for washeries.
The report further suggests exploring new supply sources such as Mongolia and Mozambique to diversify India’s heavy reliance on traditional suppliers.
Risks and the net-zero challenge
“India’s steel ambitions cannot be realised without addressing its heavy reliance on imported coking coal. While domestic production is projected to double by 2030, imports will still play a defining role in meeting demand. This dependence makes the sector vulnerable to price volatility and supply chain shocks,” the report stated.
The Indian steel industry contributes about 12 percent of the country’s greenhouse gas emissions, compared with the global average of around 8 percent. The report calls for investment in low-carbon technologies, green hydrogen, and carbon capture solutions to align with India’s 2070 net-zero goal.