India's Coking Coal Imports Set to Rise Amid Ambitious Steel Production Goals by 2030

As India targets an ambitious steel production capacity of 300 million tonnes by 2030, the demand for coking coal is expected to surge dramatically. A recent report outlines a forecasted increase in coking coal requirements from 87 million tonnes in fiscal year 2025 to a staggering 135 million tonnes by 2030. This growth reflects the steel industry's consumption of approximately 95% of the nation's coking coal, underscoring its pivotal role in the sector.

The steel industry is entering a transformative phase, driven by both rising domestic demand and intensifying global competition. Naveen Jindal, President of the Indian Steel Association, emphasized the foundational importance of coking coal in steel production and the necessity of securing a reliable, high-quality supply to support national economic growth.

In a bid to reduce reliance on imports—which currently account for about 90% of India's coking coal needs—the government has launched the Atmanirbhar Coal Mission. This initiative aims to double domestic raw coal production from 66.8 million tonnes in fiscal year 2024 to 140 million tonnes by fiscal year 2030, with contributions of 105 million tonnes from Coal India and 35 million tonnes from private allocations. Additionally, plans are underway to enhance washed coal capacity to 15 million tonnes.

Policy reforms are crucial in this context, including the introduction of 100% foreign direct investment in mining, revenue-sharing auctions, and capital subsidies ranging from 20% to 30% for washeries. These measures aim to lower import dependence to below 80% by 2030, ensuring greater supply security and accelerating the beneficiation process.

However, experts warn that this heavy reliance on imports renders the sector vulnerable to global price fluctuations. Vinayak Vipul, a partner at EY Parthenon, pointed out the necessity for India to diversify its sourcing strategies and invest in technologies that facilitate a transition toward low-carbon steel production. Establishing a transparent pricing index and maintaining a national reserve could also help mitigate risks and foster resilience.

The steel sector, while a cornerstone of industrial development, is also a significant contributor to greenhouse gas emissions, accounting for 12% of national emissions compared to a global average of 8%. This reality underscores the urgent need for investments in cleaner technologies, such as green hydrogen and carbon capture solutions, to align with India's goal of achieving net-zero emissions by 2070.

The report calls for a cohesive partnership between industry stakeholders and the government, emphasizing the importance of joint investments in washery expansion, strategic stockpiling at key ports, and public-private consortia for overseas mine equity. These collaborative efforts will be essential in securing supply chains, capturing value closer to production sources, and modernizing beneficiation processes. As India navigates this pivotal moment, the focus must remain on balancing growth with sustainability to realize its steel ambitions while mitigating environmental impacts.