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Coal imports increase by 20% to 11.6 million tonnes in February

14 Mar 2014 Evaluate

India's coal imports increased by 20 percent to 11.6 million tonnes in February from a year earlier on account of fall in global coal prices and strengthen rupee. India`s reliance on foreign coal has grown over the years as domestic production has failed to grow in line with demand. During April-February FY'14, coal imports rose by 5 percent to 143.5 million tonnes. Indonesia is the biggest coal supplier to India having market share of more than 50 percent in country’s total coal imports.

India, despite being world's fifth largest in terms of reserves, the third-largest producer of coal has failed to keep pace with increasing domestic demand, making the country the world`s third-largest importer of the fuel. Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. In the previous fiscal, India imported $16 billion worth of coal. Presently, Coal India (CIL) is the only producer of domestic coal accounting for around 80 percent of the domestic production. CIL is currently struggling to meet domestic coal requirement. CIL has recently noted that its production target of 475 million tonne (MT) coal for the current fiscal amid concerns like shutdown of mining activities in Talcher Coalfields in Odisha, and Cyclone Phailin.

Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for 68% of India's installed electricity capacity. During the April-January FY'14, India`s coal-based power generation rose 8 percent to 587.64 billion kilowatt hour from a year earlier, which led to surge in coal imports by 31 percent to 66 million tonnes by power producers in the reported period.

In order to meet India’s growing coal demand, the government has planned to invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India. The government is likely to auction 10 coal blocks in the month of March this year.

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