Coal India output won’t keep imports low

Despite Coal India reporting the sharpest production growth in two decades in FY15 and the momentum expected to remain in the current fiscal, the country’s coalimports are set to accelerate. Power companies, one of the major consumers of coal, have firmed up plans to import73 million tonne of coal this fiscal, up more than a third from last year.

Higher imports have been scheduled because of the fuel’s declining prices in global markets and the transportationbottlenecks that made domestic coal relatively unattractive for coastal power stations.

With the planned hike in coal imports by power plants, the consensus estimate of the overall coal imports for the fiscal—up 10% at 220 million tonne—could go awry. The relentless rise in coal imports in recent years has put pressure on thecurrent account, along with the heavy oil import bill, which has been a perennial issue for India.

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