The Hindu Editorial Analysis- 29th March 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Understanding India’s coal imports

Why in News?

India's coal imports surged by 30% to reach 162.46 million tonnes during the 2022-23 fiscal year, up from 124.99 MT in the preceding year. This data originates from a report unveiled by mjunction, an online platform for business-to-business transactions jointly owned by Steel Authority of India (SAIL) and Tata Steel.

• The aforementioned report was published by mjunction, an e-commerce platform facilitating business-to-business transactions, formed through a partnership between Steel Authority of India (SAIL) and Tata Steel.

India's Coal Production and Consumption

• India ranks among the top five global coal producers.
• Despite its significant production capacity, India still imports coal to fulfill a portion of its demand.
• Coal plays a crucial role in India, primarily in power generation and various industrial processes.

Import of Coking Coal

• The import of coking coal increased by 5.44% to reach 54.46 million metric tons compared to 51.65 million metric tons in FY22, as reported by mjunction.
• Coking coal serves as a vital raw material in the steel manufacturing industry.
• In March 2023, the import of non-coking coal amounted to 13.88 million metric tons, up from 12.61 million metric tons in the same period last year.
• In addition to coking and non-coking coal, India imported a total of 249.06 million metric tons of various coal types in FY23, representing a notable increase from 200.71 million metric tons in FY22, marking a rise of more than 24%.

Why Does India Import Coal?

India engages in coal imports primarily for the following reasons:

• Energy Demand: India's increasing energy requirements, especially in sectors like power generation and steel production, necessitate importing coal.
• Quality Disparities: The domestic coal quality often falls short of the desired standards for certain industries, compelling India to import superior-grade coal.
• Infrastructure Deficiencies: Inadequate transport infrastructure impedes the distribution of domestically mined coal, prompting the need for imports to meet demand.
• Price Competitiveness: Fluctuations in global coal prices sometimes make it more cost-effective for India to import coal rather than rely solely on domestic sources.

Challenges in India's Coal Sector:

• Lack of Good Quality Coal: India faces limitations in quality within its domestic coal reserves. The country lacks sufficient reserves of high-quality coking coal crucial for steelmaking and related industries. Consequently, India resorts to coal imports to offset this deficiency.
• Growing Energy Demand: India's energy requirements are on a constant rise due to population expansion and rapid urban development. Coal plays a vital role in India's energy mix, necessitating coal imports to cater to its escalating energy needs.
• Infrastructure Constraints: Various factors such as geological limitations, challenges in land acquisition, and environmental regulations restrict domestic coal production in India. Moreover, the inadequate domestic coal transport infrastructure and the considerable distance between many power plants and coal mines make importing coal a more feasible choice.
• Better Quality and Cost-Effectiveness: Importing coal from other nations can sometimes be more cost-efficient than domestic production, particularly when the imported coal surpasses the quality of domestic coal.
• Key Terminologies:
  • Coking Coal: A type of coal essential in steel production.
  • Anthracite: A dense coal variety with a high carbon content.
  • Pulverised Coal Injection (PCI Coal): A technique involving injecting pulverized coal into a blast furnace to enhance the iron-making process's efficiency.
  • Met Coke: A coke variation produced by heating coal without air. It serves as a fuel in blast furnaces for iron production.
  • Pet Coke: A carbon-rich material derived from oil refining, utilized as a fuel in industrial operations.