Coal imports

Coal imports

Subject :Economy

India’s coal imports are expected to grow by 5 per cent y-o-y to 219 million tonnes (mt) in the current financial year.

Details:

The targets for domestic coal production and imports have been estimated at 911 mt and 219 mt, respectively.

Concept:

• Coal India Limited (CIL) and its subsidiaries account for the majority of coal production in India.  CIL has set up Regional Sales Offices and Sub-Sales Offices at selected places in the country to cater to the needs of the consuming sectors in various regions.
• India imports coking coal and high grade (GCV) coal which are essential as domestic production is limited due to scarce reserves or non-availability.
  • Coking Coal is being imported by Steel Authority of India Limited (SAIL) and other Steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality.
  • Coal based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders are importing non-coking coal. 
• As per the coal directory 2020-21, India is the second largest importer, and it mainly imports coal from Indonesia, Australia, South Africa and USA.
• Coal is kept under Open General License (OGL) and consumers are free to import coal from the source of their choice as per their contractual prices on payment of applicable duty.
• Coal is allocated  the power and the non power sectors (non-regulated sectors). NRS consumers include aluminium, cement, sponge iron, paper, ceramics, tea, textile and captive power producers (CPPs).
• The electricity sector is the largest consumer of raw coal in India and accounted for 64.07% of the total coal consumed in the country in 2020-21. Other significant consumers include the steel and washery industry (6.65%), the sponge iron industry (1.06%), the cement industry (0.75%), and fertilizers and chemicals (0.19%).

Open General Licence (OGL)

• India has steadily made the process of importing products easier.
• Most items fall within the scope of India’s EXIM Policy regulation of Open General License.  
• It means that products are deemed to be freely importable without restrictions and without a license unless they are regulated by the provisions of the policy or applicable laws.
• Imports of items not covered by Open General License are regulated and fall into three categories:
  • banned or prohibited items;
  • restricted items requiring an import license; and
  • canalized items- imported only by government trading monopolies and subject to Cabinet approval regarding timing and quantity.