India’s thermal coal imports fall over declined manufacturing, not climate concerns

SINGAPORE: India’s imports of thermal coal – mainly used in power generation – fell for a sixth straight month in February, ship tracking data showed, as coal-fired power generation grew at a muted pace on the back of a slowdown in manufacturing activity.

This is the longest such streak since February 2022, when imports declined for eight consecutive months.

Manufacturing activity in the world’s fastest growing major economy slowed to its weakest pace in over a year, stifling appetite for seaborne coal in the country and adding to pressure on declining on global thermal coal prices.

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Imports of thermal coal by India – the second largest importer in the world – fell 15.3 per cent to 12.16 million metric tons in February, data from Indian consultancy Bigmint showed.

In the six months ended February 28, imports fell 20 per cent to 77.3 million.

In addition to the manufacturing slowdown, increasing domestic production and a higher share of renewable generation also contributed to the lower imports, with the country’s coal-fired power generation staying largely flat in the first two months of the year.

While coal consumption is expected to pick up in the coming months as utilities prepare to address a surge in electricity consumption during the summer months between April and June, it might not necessarily lead to a pickup in imports as domestic production is also increasing.

“Coal demand is expected to remain strong in the coming months during the summer season. However, the non-power sectors continue to experience sluggish market conditions,” India-based coal trading firm I-Energy said in a note on Monday.

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Thermal coal prices have rebounded slightly in recent weeks after plunging to multi-year lows in 2025 amid market concerns about weaker global demand. However, they are still trading over 30 per cent higher than levels seen in the second half of the previous decade.

A sustained decline in Indian thermal coal imports comes at a time when shipments purchased by top importer China are growing, though analysts and industry officials have flagged potential risks in the months ahead.