India’s Thermal Coal Imports from Russia Reach Two-Year Peak

India’s thermal coal imports from Russia have seen a remarkable increase, surging by 52% in May 2025 compared to April, reaching a two-year high of 1.3 million metric tonnes. This significant rise marks the first time since June 2023 that Russian shipments to India have exceeded the 1-million-tonne threshold. Analysts attribute this spike to competitive pricing and the superior quality of Russian coal, making it a more attractive option than supplies from Indonesia. As the monsoon season begins, experts suggest that the demand for thermal coal may continue to rise, impacting India’s energy landscape.

Surge in Coal Imports

In May 2025, India’s total thermal coal imports rose to 17.4 million tonnes, marking a 10% increase from the previous month and the highest level since June 2024. According to data from BigMint, Russian coal accounted for 7.5% of these imports, while Indonesia remained the leading supplier with 9.8 million tonnes, reflecting a 16% increase from April. Imports from South Africa remained stable at 3.4 million tonnes, whereas those from the United States saw a significant jump of 43%, reaching 2 million tonnes. This shift in import dynamics highlights the growing preference among Indian buyers for high-calorific-value Russian coal, driven by its quality and competitive pricing.

Impact of Monsoon Season

The onset of the monsoon season in India has prompted analysts to predict an increase in coal consumption. Evgeny Grachev, director of the RF Centre for Price Indices, noted that the early arrival of the monsoon could lead to heightened pressure on thermal generation and coal usage. This seasonal shift may further influence India’s energy strategies, as the country balances its reliance on imported coal with its domestic production capabilities. Despite the current surge in Russian coal imports, experts caution that geopolitical uncertainties, including tensions in the Gulf region, could pose challenges for Russian exporters.

Long-Term Market Trends

While the recent spike in Russian coal imports is noteworthy, industry experts remain skeptical about a sustained increase in Russia’s market share in India’s coal imports. Factors such as India’s expanding domestic coal production and the logistical challenges associated with importing Russian coal could limit long-term growth. In the fiscal year 2025, India’s overall coal imports decreased by 7.9% to 243.62 million tonnes, resulting in a foreign exchange saving of $7.93 billion. The decline was particularly pronounced in thermal power plants, where blending-related imports fell by over 41%, underscoring India’s commitment to achieving energy self-reliance.

Domestic Production and Future Outlook

India’s domestic coal output has shown a positive trend, with a 3.6% increase in April 2025, reaching 81.57 million tonnes. Coal India Ltd, which dominates domestic production, aims to boost output to 875 million tonnes in the fiscal year 2026. Despite this push for increased domestic supply, experts acknowledge that imports of high-grade thermal and coking coal will remain crucial for sectors such as power, steel, and cement, which rely on consistent quality and supply. As India navigates its energy landscape, the balance between domestic production and imports will be key to meeting its growing energy demands.

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