India's coal imports rose by nearly a third to a record 135 million tonnes in the last fiscal year, data from government sources showed, and are set to grow further as the world's third-biggest producer struggles to raise domestic supplies.
A drop in global coal prices, however, softened the impact of the surging imports on India's finances, with the country forking out about $15.5 billion for the commodity in the year ended March 31, a less than 1 percent rise from the previous year, the data obtained by Reuters showed.
India, which does not release coal import data on a regular basis, places no restrictions on the imports of the commodity, which are brought into the country by traders and consumers.
Despite its abundant reserves of about 286 billion tonnes, the world's fifth-largest according to BP PLC, coal production in India has failed to keep pace with demand from utilities for several years now, leading to chronic power shortages that have crimped economic growth.
More than half of the country's 223.3 gigawatt installed capacity is produced from coal, according to the Central Electricity Authority.
India's total coal imports, which include coke and briquettes, apart from thermal and coking coal, were 105 million tonnes in 2011/12. The latest numbers mean imports have increased five-fold over the past decade.
POWER GROWTH PLAN
Imports of thermal coal jumped three-quarters to 97.23 million tonnes in the fiscal year through March, while those of coking coal, used in making steel, rose 1.2 percent from a year earlier to 32.2 million tonnes, the data showed.
Coal traders said they expect thermal coal shipments to rise further to 115 million-120 million tonnes in the year to March 2014 on growing demand. India plans to add generation capacity of 88.54 gigawatt in the five years to end-March 2017, compared with almost 55 gigawatt in the previous five-year period.
Coal imports in March rose 29 percent from a year earlier to 11.4 million tonnes, of which thermal coal shipments accounted for nearly 80 percent, the data showed.
Indonesia, the world's top exporter, shipped out 40 percent more coal to India from a year earlier at 77.49 million tonnes in 2012/13, the data showed. Australia and South Africa accounted for the bulk of the remainder.
Global coal prices have been under pressure since last year on weak Chinese demand growth coupled with healthy supply increments from traditional exporters and the United States.
Benchmark prices slid to as low as $80.82 a tonne during 2012/13 from more than $105 in the prior year and are currently quoted at around $87.