The Indian Government has directed its states to boost coal imports to meet the required demand, for the coming three years, reported Reuters citing four sources.
The decision by the government comes amid a severe fuel crisis as the country’s coal inventories reached the lowest pre-summer levels in the past nine years.
Said to be the second-largest coal importer in the world, India is expected to significantly add to the global demand for coal during the next three years.
This is due to a longer timeline set up by Indian Power Minister R K Singh, seeking to increase coal imports.
A power ministry official, who attended Singh’s meeting with state officials, said: “The states were asked to continue importing because the private sector will take till at least early 2025 to produce significant output.”
Another ministry official said that the states were urged to sign long-term deals for coal imports to reduce prices while ensuring supply.
The states were also asked to purchase rail wagons to help address logistics problems.
Last month, the Indian government said it ‘achieved a significant reduction in import despite a surge in power demand’, as a result of key reforms.
One of the state officials at the meeting said: “Only last year, they told us to cut down imports.
“Now they want us to import as much as we can and are saying there are supply constraints. This is a very confusing, mixed signal.”
Last month, a senior coal ministry official was reported by Reuters as saying that India is expected to produce 350-400 million tonnes (Mt) of coal from private coal mines by the end of this decade.
More than 90% of India’s coal imports are from Australia, Indonesia, and South Africa.