The Indian government plans to reduce coal imports by at least a third in the next five years, Bloomberg reports citing informed local sources. The reduction is planned due to increased domestic production and increased production of electricity from renewable energy sources.
By March 2024, it is planned to reduce imports to 150 million tons from the level of 235.2 million tons achieved last year.
The local company Coal India will have to increase its annual coal production to 880 million tons to achieve the goal.
Prime Minister Narendra Modi wants to increase the country's economy to $5 trillion by 2024, from the current 2.8 trillion, and reducing energy imports and using domestic resources are keys to achieve this. The import reduction plan also points to the country's gradual withdrawal from coal to combat the “deadly” air pollution that affects millions of people.
Indian imports will be dominated by purchases of coking coal by steel producers, as domestic capacity is limited. Power plants that require higher-quality imported coal will also remain large consumers of foreign coal.
Difficulties in buying land for mining, delays in obtaining licenses and a weak railway network did not allow to implement plans to reduce dependence on imports, and imports rose to a record level.
Nevertheless, the goal of reducing imports today seems more achievable, as Indian Railways plans to overhaul its network and build branches on new fields in support of production growth.