Friday, 07 Nov, 2025
According to data released by the Ministry of Coal, while coal imports had zoomed to an all time high of 248 million tons in 2019-20, they have declined in the subsequent years
Many people think that the big rise in the import bill of India is the sustained rise in global oil prices apart from increased gold imports. What most of them tend to ignore is another source of energy: coal. Huge coal imports are also responsible for the inflated import bills in the country. According to data released by the Ministry of Coal, while coal imports had zoomed to an all time high of 248 million tons in 2019-20, they have declined in the subsequent years. During 2020-21, coal imports declined to 215 million tons and fell further to 209 million tons in 2021-22. The value of coal imports in 2019-20 was estimated to be $ 22.35 billion; falling to $ 15.66 billion in 2020-21. The decline can be traced to a crash in commodity prices during the Covid pandemic in 2020 when global supply chains were disrupted and most major economies of the world actually registered negative growth. For example, GDP growth rate of India during the financial year 2020-21 was a negative 7.7%.
As the accompanying chart shows, after declining rapidly during the first few years of the first term of the Narendra Modi regime, coal imports started rising in a big way in about 2017. The primary reason was the inability of Coal India and other mostly public sector companies to ramp up production even as demand for coal zoomed because of rising demand for electricity. In 2021-22, domestic coal output rose by more than 60 million tons, resulting in lower imports. But the big question is: can the public sector coal mining companies keep up the pace of domestic coal output? As the chart indicates, output rose dramatically in the first few years after 2014 and then stagnated. It as shot up again in the last year or so; but many experts wonder if the growth can be sustained. Besides, thanks to the coal block allocation scam during the UPA regime that resulted in the Supreme Court cancelling all allocations to private sector players, their contribution to domestic output has not been as large as originally envisaged and planned.
Even with the decline, imports in excess of 200 million tons are troubling for a country that already has a high import bill and a large trade deficit. That’s because domestic production should be much higher than what it is currently. India has the fifth largest reserves of coal in the world and Ministry of Coal data reveals that India has about 319 billion tons of coal reserves. With such massive reserves, coal imports should be minimal. But then scams and then the failure to kickstart coal mining in a big way by private players using modern technology have resulted in this needless import bill
