Coal Import Declines to 209 Million Ton in 2021-22

India has a balanced energy basket and coal sector is an important contributor in fulfilling nation's energy needs. Coal is a critical input for power, fertilizer, iron & steel and cement sector.

Coal imports, which had reached a peak of 248 Million Ton (MT) in 2019-20, declined continuously during the next two years to 215 MT in 2020-21 and further to 209 MT in 2021-22.

Despite steep rise in actual demand of coal from 956 MT in 2019-20 to 1027 MT in 2021-22, coal imports have not increased. Coal import grew at a compound annual growth rate (CAGR) of 22.86% during the period 2009-10 to 2013-14. At this CAGR, coal imports would have reached 705 MT in 2020-21 and further to 866 MT in 2021-22. The import of coal could be checked only by sustaining increased domestic supply over the years.

All India coal production has increased from 716 MT in 2020-21 to 777 MT in 2021-22 resulting in an increase of 61 MT. Therefore, despite a steep rise in actual demand for coal from 906 MT in 2020-21 to 1027 MT in 2021-22, coal imports could be contained due to increased domestic dispatch from 691 MT in 2020-21 to 818 MT in 2021-22.

Domestic dispatch has not only increased to the power sector but also to non-power sector by 101 MT in 2020-21 to 104 MT in 2021-22.

The decline in coal import during 2021-22 is largely due to decrease in import by Power Sector which came down from 45 MT in 2020-21 to 27 MT in 2021-22, decline of almost 40%. The decline is more steep if we compare coal imports by power sector in 2021-22 to pre-covid year of 2019-20 when such import was 69 MT. This is despite the fact that total thermal power generation in the country increased to 1115 BU in 2021-22 from 1032 BU in 2020-21, an increase of 83 BU in absolute terms and  almost 8 % in percentage terms.

Coking Coal import was 57 MT with a growth of 11.65% during 2021-22 which is largely used in the Steel Sector. However, as compared to pre-covid year of 2019-20, the growth in coking coal import is around 10%. Coal imported by Non-regulated Sector (Cement, Sponge Iron & Paper) increased to 125 MT in 2021-22 from 119 MT in 2020-21 an increase of 5.23%.

Compared to the pre covid year of 2019-22, when imports by non-regulated sector was 127 MT, imports by this sector has actually declined in 2021-22. Thus, increase in import of coal by non-power sector during 2021-22 is largely on account of growth in import of coking coal and import of coal by non-regulated sector which largely import high grade thermal coal. Supply of both these categories of coal are limited in the country.