India’s Coal Imports Shift Towards Steel as Metallurgical Demand Rises

India’s coal import basket is undergoing a notable shift, with the steel industry emerging as a bigger driver of overseas purchases even as imports of thermal coal decline.

India imported around 244.2 million tonnes of non-coking and metallurgical coal in FY2025-26, broadly unchanged from the 245.3 million tonnes recorded in the previous financial year, according to an MCX report. The headline figure, however, masks a significant change in the composition of imports.

Metallurgical coal imports rose 10.4% year-on-year to 84.5 million tonnes during the year, compared with 76.3 million tonnes in FY2024-25. The increase was led by higher purchases of coking coal, a critical raw material for blast furnace-based steelmaking.

Coking coal imports increased 12.4% to 63.7 million tonnes from 56.6 million tonnes. Imports of pulverised coal injection, or PCI coal, also rose 6.2% to 20.9 million tonnes from 19.6 million tonnes.

The trend reflects the continuing requirement of India’s expanding steel industry for specific grades of coal that are not always available in sufficient quantities domestically.

At the same time, non-coking coal imports declined 5.5% to 159.7 million tonnes from 169 million tonnes. Improved domestic availability of thermal coal has reduced the need for imports used primarily by the power sector.

The change is also visible in India’s supplier mix. Russia emerged as a growing source of coal, with shipments increasing 13.1% to 32 million tonnes in FY2025-26. Russian coking coal supplies rose 12.1% to 9.2 million tonnes.

Australia remained the dominant supplier of premium coking coal. Its overall coal exports to India increased 9.3% to 43 million tonnes, while Australian coking coal shipments rose 13.4% to 34.3 million tonnes.

The changing import pattern could become increasingly important as India expands steel production capacity. With domestic thermal coal availability improving, future coal import growth is likely to be influenced more by steel output and the availability of suitable metallurgical coal than by power-sector demand.

For steelmakers, access to reliable and quality coking coal supplies will therefore remain an important factor as India continues to build capacity and strengthen its domestic manufacturing base.