India's Coal Imports Grew 22% In FY23 Even As Domestic Production Rises

India's import of coal rose 22% year-on-year in fiscal 2023, after witnessing a consistent fall over the last three years. The imports have risen, even as domestic coal production has gone up by 23% in the last five years.

Imports were up at 254 million tonne in FY23, according to data sourced by BQ Prime from the Ministry of Commerce and Industry's website, based on HSN Code.

The increase in imports in FY23 compares with imports of 208.9 million tonne in FY22; 215.25 million tonne in FY21; and 248.54 million tonne in FY20.

The data indicates that the imports are back to pre-Covid levels of over 240 million tonne.

The increase is primarily led by steam or thermal coal imports that rose 28.5% year-on-year to 161.74 million tonne, on higher demand from the power sector.

The imports are likely to be higher in FY24, and power consumption is also projected to grow in double digits in the coming months, in view of unprecedented demand forecast by the Ministry of Power. Peak power demand is projected to grow to 229 GW by June this year, which compares with the peak of 215 GW a year ago.

However, the import of coking coal, that goes into production of steel and iron, saw a drop of 1.9% year-on-year to 56.1 million tonne.

Coking coal imports are expected to grow in FY24, on the back of increased production of steel in the country. India's steel production grew by 6% YoY to around 125 million tonne in FY23, from around 118 million tonne in FY22. In the absence of quality domestic coking coal reserves, imports are expected to rise in the near future.

Import of Anthracite and Bitumen coal also dropped year-on-year by 12.3% and 58.8%, respectively, in FY23.

Domestic Coal Production Rises 23% In Five Years

India's overall coal production in FY23 saw a jump of 22.6%, as compared with production figures of the last five years. In fiscal 2023, coal production rose to 893.08 million tonne, as compared with 728.72 million tonne in FY19.

The Coal Ministry has set up a plan to enhance domestic coal production and reduce the dependence on substitutable coal imports. The ministry targets 1,012 million tonne of coal production in FY24.

In the last five years, the production of Coal India Ltd. has increased by 15.9% to 703.21 million tonne, as compared with 606.89 million tonne in FY19.

Similarly, production from captive and other coal mines for the period more than doubled or grew by 113.7% to 122.72 million tonne in FY23, from 57.43 million tonne in FY19.