132 mt of coal arrived in H1 FY23, pushing the import bill to a record $28 billion.

The first half of the current fiscal year saw India import 131.92 million tonnes (mt) of coal for a whopping 2.31 lakh crore, or about $28 billion at Wednesday’s exchange rate, the highest amount thus far in value terms since FY19. The high value of imports was caused by rising global coal costs, which were mostly driven by the conflict between Russia and Ukraine, and a declining value of the rupee in relation to the US dollar. According to information presented by Coal Minister Pralhad Joshi in a written response in the Rajya Sabha, the amount of coal imported in FY22 was 208.93 mt, valued at 2.29 lakh crore, down from a record 248.54 mt, valued at 1.53 lakh crore, imported in FY20.

In comparison to H1 FY22, the average landed price of imported coal increased by 58% to $19,324.79 per tonne. The average price of imported coal in H1 FY23 was more than double the landed price of $6,215.32 per tonne during the Covid-impacted FY21. Coking coal and high quality coal are primarily imported by India since domestic production is constrained by limited reserves or lack of availability. Coking coal and high-grade coal are often more expensive than thermal coal.

Indian coal is typically used by power plants and has a lower calorific value. Domestic coal’s average notified price (ex-colliery) for the first half of FY23 was $2,662.97 per tone, up from $2,306.53 in FY22 and $2,206.97 in FY21. According to CareEdge, the price of South African thermal coal, a benchmark globally, has been rising since November 2021, and since the start of FY23, geopolitical tensions between Russia and Ukraine have significantly affected price fluctuations. The global benchmark price as of July 2022 had surpassed its all-time high of almost $300 per tone in April 2022, reached $329 in July 2022, and finally settled at $321 per tone in September 2022.

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