India’s coal industry is the second largest in the world with production in its 2022 – 2023 fiscal year (ended 31 March) of 893 million t, an annual increase of 14.8%, having achieved 8.7% growth in the previous year, with the country now accounting for over 10% of global production, ranking it second after China.
Targeting self-reliance
This growth is being driven by the Indian government’s push to reduce dependency on imports and realise AtmaNirbhar Bharat, or ‘self-reliant India’. Imports of coal are critical to India and have been steadily rising, accounting for 24% of consumption in 2022 compared with 12% in 2010. In order to achieve self-reliance, the Indian government is working towards increasing the domestic output to over 1 billion t of coal in 2023 – 2024 and 1.5 billion t by 2029 – 2030, with coal-fired power remaining a key element of its electricity portfolio.
In 2023, coal-fired power is forecast to account for 72% of total power generated in India, with a slight reduction by 2030 to 64%. While a reduction, by 2030 this figure will compare to coal’s share of 27% of total power generation globally and 45% of power produced in China, currently the world’s largest producer of coal-fired power. Renewable power is growing – in April, the Indian government set a target of having? 500 GW?of installed renewable energy by 2030, including 280 GW of solar power and 140 GW of wind power – but while India did commit to a ‘phase down’ of coal at the COP26 global climate forum in Glasgow in 2021, it does not mean a reduction in overall coal demand. Overall demand for coal is forecast to rise from around 1.1 billion t in 2022 – 2023 to over 1.6 billion t by 2029 – 2030, with the share of coal for power generation forecast to account for two-thirds of the total. By 2030, India’s share of global coal-fired power is expected to jump from 13% in 2023 to 18%. In contrast, China’s share of total coal-fired power generation is forecast to remain relatively flat, rising from 54% in 2023 to 56% in 2030.
India’s steel industry is also growing, and, like the power sector, is reliant on imports. In 2022 – 2023, metallurgical coal production was 60.77 million t, equal to 7% of total coal production, whilst met. coal demand was almost twice that amount. The country’s steel industry is one of the fastest-growing in the world, with output of crude steel in 2022 of 124.7 million t, according to the World Steel Association, making it the second-largest producer after China. It was also the only country amongst the top nine producers to register growth in 2022, with a 5.5% increase on the prior year, and there are ambitions to expand steel production capacity from 150 million t in 2023 to 300 million t by 2030 – 2031.
