India’s thermal coal imports fell for the sixth consecutive month in February, with a 15.3% drop to 12.16 million metric tonnes. The decline is the longest since early 2022, driven by slowing manufacturing and rising domestic coal production. Thermal coal prices remain over 30% higher than last decade.
India’s thermal coal imports have experienced a significant decline, marking the sixth consecutive month of reduction as of February 2025. This trend, the longest since early 2022, is attributed to a combination of factors including a slowdown in manufacturing activity, increased domestic coal production, and a strategic shift towards renewable energy sources.
Declining Import Figures
In February 2025, India’s thermal coal imports fell by 15.3% year-on-year, totaling 12.16 million metric tons. Over the six months leading up to February 28, imports decreased by 20%, amounting to 77.3 million metric tons. This consistent decline underscores a significant shift in the country’s energy consumption patterns.
Impact of Manufacturing Slowdown
The deceleration in India’s manufacturing sector has played a pivotal role in reducing thermal coal demand. Manufacturing activity slowed to its weakest pace in over a year, diminishing the appetite for seaborne coal. This slowdown has led to muted growth in coal-fired power generation, further contributing to the decline in imports.
Rise in Domestic Coal Production
India’s efforts to boost domestic coal production have also influenced import levels. The government has implemented policies to increase local coal output, aiming to reduce dependency on imports. This strategy has been effective, as evidenced by the sustained decrease in thermal coal imports.
Shift Towards Renewable Energy
The country’s commitment to expanding its renewable energy capacity is another factor contributing to the reduced reliance on thermal coal. By investing in solar, wind, and other renewable sources, India is diversifying its energy mix, leading to a gradual decrease in coal consumption.
Global Context and Future Outlook
India’s declining thermal coal imports contrast with trends in other major economies. For instance, China’s imports of thermal and metallurgical coal rose by 29% in October 2024, primarily due to higher thermal coal imports, setting the stage for record-high shipments in 2024. This divergence highlights India’s unique position in the global energy landscape.
Looking ahead, while coal consumption is expected to rise during the summer months due to increased electricity demand, it might not significantly boost imports. The combination of growing domestic output and a higher share of renewable energy suggests that the current trend of declining thermal coal imports may continue.
In conclusion, the sustained drop in India’s thermal coal imports reflects a multifaceted shift driven by economic, industrial, and environmental factors. As the country continues to navigate these changes, the energy sector is poised for a transformation that prioritizes sustainability and self-reliance.
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