India’s non-coking coal imports have declined considerably by around 4% y-o-y to 89 million tonnes in the first half of 2025, with a substantial m-o-m drop by 14% in June to 15.53 million tonnes. This decline is primarily attributed to cooler summer weather, heavy rainfall, and an early monsoon that reduced the need for coal-based power generation, despite overall power production rising. Coal-fired power generation in May 2025 even witnessed a fall to its lowest level in the last five years.

Country-wise, imports from Indonesia, which has been the top supplier, dropped by 12% y-o-y to 52 million tonnes due to increased domestic coal production in the country. Meanwhile, imports from South Africa have risen sharply by 27% to 19 million tonnes, largely due to higher demand from India’s sponge iron industry, which prefers the low-ash, high-quality coal from the region. Sponge iron production itself increased by 10% y-o-y to nearly 30 million tonnes during the same period, driving this trend.

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Outlook:

India's non-coking coal imports are expected to remain subdued in the power sector due to ongoing government efforts to ramp up domestic production and ensure a steady coal supply to utilities. However, industrial demand, particularly from the steel and DRI sectors, is likely to maintain import volumes stable or can push higher in the second half of the year. Due to increased consumption of high-quality, low-ash coal for industrial use, coupled with steady growth in sponge iron output, it is likely to support imports from countries like South Africa and the U.S. However, imports from Indonesia may remain under pressure.