India trying to strengthen reliance on domestic coal production due to high inflationary pressures

Coal accounts for around 75% of India's power generation at over 150 million tonnes (MT) annually. At present, India's annual coal demand is around 950 MT. Along with its domestic demands in the energy sector; it has a large contribution in the steel industry. The country is the second-largest producer of crude steel; hence it requires a steady supply of coking coal.

- Kuntala Sarkar

India has invested around ₹2 lakh crore in foreign exchange for coal imports at an average rate of about $200 per tonne in FY23. The import costs are escalating gradually, in the wake of high inflationary pressures globally. Additionally, the Russia-Ukraine crisis has increased the price of fossil fuels, which is pushing the Union government to ramp up domestic coal productions.

Output of domestic coal accelerating

In November, 2022 the output of the core sector in India expanded sharply at 5.4%, while coal accelerated by 12.3% YoY. Its cumulative index has expanded by 0.7% during April - November, 2022, compared to the same period in 2021.