Information tabled in Parliament suggests that coal imports in FY22 have declined, despite growth in coal-based power generation.
It was informed in Parliament that imports of non-coking coal declined by over 18 per cent to 107.36 million tonnes in the April-November period of FY22, from 131.51 million tonnes in the same period of FY20. (See table). Non-coking coal is a variety of coal that is used to fire coal-based power plants.
In the same period, coal-based power generation has shown a 5.2 per cent increase, and domestic coal production has grown by 9 per cent.
This only means that growth in coal-based electricity generated in the April-November period of FY22 has largely been driven enhanced domestic coal production.
India has recently taken active steps to accelerate domestic coal production and reduce imports. For instance, the coal ministry has amended the Mineral Concession (Amendment) Rules, 1960 under MMDR (Amendment) Act, 2021 to allow lessee of captive mines to sell coal or lignite up to 50 per cent of the total excess production after meeting the requirements of the end-use plant.
With this amendment, the coal ministry has paved the way for releasing of additional coal in the market by greater utilization of mining capacities of captive coal blocks. This additional coal availability amounted to 53.27 million tonnes in the April-November period of FY22, up 36 per cent from 39.15 million tonnes in the like period of FY20.
It was also informed that India is generally becoming self-reliant with respect to coal, and this is borne out by a decline in overall imports of coal (including non-coking coal that has been tabulated above). Imports of all grades of coal fell by 11.1 per cent to 147.14 million tonnes in the April-November period of FY22, from 165.57 million tonnes in the same months of FY20.
Given that international coal prices have been on the rise in recent years, the decline in coal imports has contributed to a significant saving of foreign exchange.
Important note: The government release has pointed out that the above discussion is based on the years FY22 and FY20. The financial year FY21 has not been taken as it was an “abnormal” year due to the sharp decline in industrial activity, in turn caused by pandemic-induced restrictions. As such, comparison between FY22 and FY21 would not have been representative of normalcy.
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