Key Takeaways:

• Domestic coking coal output is rising, but washed coal supply remains a bottleneck for steelmakers.

• Australia’s dominance in coal imports is declining, as India diversifies to Russia, the USA, and Indonesia to reduce supply risk.

• Government reforms (SHAKTI, Mission Coking Coal, logistics policy) are aligning coal supply chains with National Steel Policy goals.

• Met coke imports are falling due to import restrictions and emphasis on domestic capacity expansion.

• Total coal imports saw a modest YoY decline in 2025, driven by improved domestic availability and policy shifts.

Introduction:

India's coal industry plays a crucial role in the country’s industrial and energy infrastructure, as coal accounts for a significant proportion of the country's electricity generation and is the primary raw material for many heavy industries, such as steel. India's coal sector has undergone significant changes in recent years, transitioning from discretionary allocation of coal blocks to competitive auctioning, enhanced transparency, increased efficiency, and private investment. Demand for coal has risen with fast economic growth, urbanization, and industrialization. Besides domestic production, there is a heavy dependency on imports for high-grade coal.

Domestic Production & Consumption

India's indigenous raw coking coal production has consistently risen from around 51 million tonnes in 2020 to a projected 66 million tonnes by mid-2025. Yet, washed (utilizable) coking coal production has been capped at 7–8 million tonnes per annum, affirming the country's dependence on imports to meet steel industry demand.

Major producers like Bharat Coking Coal Ltd (BCCL), Central Coalfields Ltd (CCL), and Eastern Coalfields Ltd (ECL) are also increasing their capacities, with government efforts like the Mission Coking Coal to improve washed coal supply.

Import dependency

Australia has been the dominant source of coking coal for India, holding approximately 80% market share in 2020. However, efforts to diversify other sources have substantially reduced Australia’s share to approximately 53% in the first half of 2025. Other countries for sourcing coking coal are Russia, the United States, Mozambique, and Indonesia, which have gained prominence and have substantially reduced India’s supply risk and enhanced its negotiating position.

It has been observed that the United States, Russia, and Indonesia are strengthening their positions in the Indian market. Indonesian coal, in particular, has shown increasing acceptance given its suitability for blending .

The table below highlights these shifts in India’s coking coal import sources:

In July 2025, coal and coke imports witnessed a mixed trend driven by sectoral dynamics and policy drivers. Import of coking coal jumped to an all-time high of around 6.1 million tonnes underpinned by strong steel production and continued curbs on met coke imports. Conversely, met-coke imports declined to a 20-month low of around 0.3 million tonnes in the face of import restrictions and lacklustre demand. Coal imports for thermal use dropped to a seven-month low of around 5.1 million tonnes, in line with softer electricity demand and steady domestic supply. Pulverised coal injection (PCI) coal imports remained at around 0.3 million tonnes, consistent with steady steel production activity. Anthracite imports dropped to a five-month low of around 0.1 million tonnes on soft end-user demand. On the other hand, coke imports from petroleum improved to around 0.25 million tonnes, led by increased demand from the cement sector and good price levels.

Technological Advancement

Indian steelmakers are embracing technological advancements to reduce import dependence and costs. The efforts include:

• Stamp-charged coke ovens, enable more utilization of semi-soft and domestic coals with high ash content without affecting the quality of coke.

• Pulverised Coal Injection (PCI), with applications rising to around 170 kg per tonne of hot metal, contributes towards a reduction in coke consumption from about 404 kg/t to close to 380 kg/t.

• AI-driven monitoring systems ensure better optimization of coal blending , allowing plants to utilize a wider coal grade range cost-effectively.

These innovations not only improve fuel efficiency but also lower production costs and increase operational flexibility.

Under the government's Mission Coking Coal initiative, the objective is to raise usable domestic coking coal production. This would substantially reduce reliance on imports while aligning with the National Steel Policy targets.

Key Milestones

 Coal Auction milestone

Policy Intervention

The Indian government’s policy reforms include quantitative restrictions on metallurgical coke imports to bolster domestic producers. Furthermore, schemes such as the Mission Coking Coal and National Steel Policy focus on increasing washed coal output, expanding captive mining, and modernizing coke ovens. These efforts support India’s ambition to produce 300 million tonnes of steel annually by 2030.

Outlook

India’s coking coal and metallurgical coke sectors are in the midst of a strategic transformation.  The country has been diversifying its import sourcing, along with enhancing its domestic production, adopting technologies to improve productivity and efficiency, and evolving in fuel blending techniques. These collective efforts are improving cost competitiveness and supply resilience.

Though imports, especially of coking coal, will remain essential in the medium term. But India is steadily building a balanced and sustainable steel raw material supply chain, key to supporting its steel sector growth for a more sustainable future, to remain competitive in the global market.