NEW DELHI (Reuters) - India plans to significantly reduce its thermal coal imports in “the next few years” to save foreign exchange and create jobs through the development of existing and new coal blocks, a senior official in the federal coal ministry said on Tuesday.
Coal is among the top five commodities imported by India, the world’s largest consumer, importer and producer of the fuel after China.
India spent 1.58 trillion rupees ($21.28 billion) on importing 247 million tonnes of coal, including 197 million tonnes of thermal grade, in the fiscal year to March 2020, M. Nagaraju, a joint secretary in the coal ministry, told a seminar.
“As per our assessment, we can actually substitute between 110-120 million tonnes of coal. We will not be able to do this year, but certainly we will do in the next few years,” Nagaraju said, without giving more detail on the timeframe.
He said increasing local coal production would help to improve the economies of states in central India, where most coal mines are located.
To boost local output, India in June launched an auction of 41 coal blocks with an annual production capacity of nearly one third of total national output.
The blocks offered with generous commercial terms are also aimed at attracting foreign investment to a sector dominated by state-run Coal India Ltd COAL.NS.
Prime Minister Narendra Modi wants India, with the world’s fourth largest coal reserves, to be a net coal exporter.
India’s thermal coal demand this year has fallen because of the economic contraction triggered by lockdowns to slow the spread of the new coronavirus.
“Future of coal is not as bright as it used to be in past but it is not as bleak as some people might say because coal continues to be an important player in the energy mix of the country for at least next 30 years,” Nagaraju said.
Reporting by Nidhi Verma; editing by Barbara Lewis
Our Standards: The Thomson Reuters Trust Principles.