KEY NUMBERS
- Total Imports: 244.2 million tonnes of non-coking and metallurgical coal in FY2025-26.
- Metallurgical Coal Growth: Imports surged 10.4% year-on-year to 84.5 million tonnes.
- Coking Coal Rise: Increased by 12.4% year-on-year to 63.7 million tonnes.
- Non-Coking Decline: Dropped 5.5% year-on-year to 159.7 million tonnes.
- Russian Supply Surge: Russian coal shipments jumped 13.1% year-on-year to 32 million tonnes.
MARKET ANALYSIS
India's coal procurement is undergoing a fundamental realignment. In FY2025-26, while the headline figure of 244.2 million tonnes of imported coal remained broadly stable against the previous year's 245.3 million tonnes, the internal composition changed dramatically. Non-coking coal imports, primarily utilized by the thermal power sector, fell by 5.5% to 159.7 million tonnes. This decline directly reflects improved domestic coal availability, with India’s overall coal production hitting a record 1,047.52 million tonnes in FY2024-25, alongside significant boosts from captive and commercial mines scaling up to 210.46 million tonnes in FY2025-26.
Conversely, the metallurgical segment, crucial for steel manufacturing, has witnessed robust growth. Driven by an inability of domestic supply to meet the stringent quality requirements for steelmaking, total metallurgical coal imports climbed 10.4% to reach 84.5 million tonnes. This indicates that future trends in India's coal imports will be increasingly dictated by industrial and steel production metrics rather than electricity demand.
Furthermore, this structural shift is fundamentally reshaping India's supplier matrix. Russia is rapidly expanding its footprint, emerging as one of India's fastest-growing coal suppliers with a 13.1% increase in shipments, highlighting a growing presence in both the metallurgical and thermal segments. Concurrently, Australia maintains its vital role as the primary source of premium coking coal, registering a 9.3% rise in overall coal exports to India.
WHAT IT MEANS FOR THE STEEL INDUSTRY
For the Indian steel sector, this trend underscores a critical dependence on global markets to sustain its growth trajectory. As India aims to double its steelmaking capacity to 300 million tonnes by 2030, securing reliable access to high-grade metallurgical and coking coal is paramount.
The rising import figures for coking coal (up 12.4%) and pulverized coal injection (PCI) (up 6.2%) highlight the sector's robust activity and its immediate need for premium raw materials that are scarce domestically. This reliance necessitates strategic diversification of supply chains, as seen with the increasing imports from both traditional partners like Australia and emerging, cost-competitive suppliers like Russia. The industry must navigate these global supply dynamics effectively to ensure stable production costs and maintain global competitiveness.
MARKET OUTLOOK
The outlook for India’s coal import dynamics points toward a continued steel-centric focus. With the government’s 'Mission Coking Coal' aiming to increase domestic raw coking coal production to 140 MT by FY 2029-30, there is a clear strategic push for self-reliance. However, the persistent quality gap in domestic reserves means that imported metallurgical coal will remain indispensable for the foreseeable future.
As domestic thermal coal production continues to strengthen and potentially caps non-coking coal imports, the volume and value of metallurgical coal imports will dominate trade figures. Investors and industry stakeholders should anticipate sustained demand for premium coking coal, closely tied to India’s infrastructure development and its ambitious steel capacity targets, fostering long-term opportunities for global suppliers equipped to meet these specialized requirements.