Global Coal Import Market with India Context – An Overview
India is the world’s second-largest importer of thermal coal, and has the potential to be an ongoing source of demand growth — a bright light for thermal coal exporters confronted with falling demand in Europe, North America and North-East Asia. India’s thermal coal consumption is likely to continue to increase next decade, and possibly beyond, in order to meet India’s increasing energy requirements. Hence, the pace of India’s coal production growth will be the key driver of its future thermal coal import needs.
Historically, imports declined for a couple of years beginning 2013–14, due to government efforts to boost production combined with slowing industrial production growth. However, imports bounced back in the subsequent years, as power demand rebounded. India now relies on imports for around a fifth of its thermal coal consumption. Despite the ongoing government target of self-sufficiency, the power and industrial sectors have had to source thermal coal from the seaborne market, with domestic production and infrastructure capacity failing to keep pace with consumption.
61% of the total thermal coal are imported from Indonesia due to the relatively low cost of Indonesian Coal
BUSINESS CASE FOR COAL IMPORT MARKET IN INDIA
- Promising economic and industrial growth of the country driving massive energy and infrastructure demand
- India’s imports lift rapidly on the back of strong growth in energy demand, challenges integrating renewable generation into the electricity grid, and barriers to increasing domestic coal production.
- Only super critical thermal power capacity addition after 2017
- Greater interaction between the Indian and Global coal markets
- Paris Climate change pledges to reduce CO2 emissions
- Smart cities and smart grid is promoted which are both the right enablers for developing a robust EV Market growth in India
- Changing charging infrastructure industry structure in India with many global majors planning to enter the market which shall open up scores of opportunity for value chain players with increasing FDI