Highlights

India & Indonesia are to be hold bilateral 5th joint working group on coal reforms. Both countries decided to host virtual meeting on 5 Nov 2020 due to pandemic. Bilateral meeting is to deliberate on Indian Coal policy reforms such as coal exploration and commercial coal mining, research & development and potential in off Indonesia India business cooperation on coal in the post Pandemic.

During the Bilateral virtual meeting the countries will discuss on bringing Industries from both sides on a common platform to discuss the issues that are affecting the opportunities of regulatory framework of coal production. Both Countries will explore areas of business opportunities in coal sector.

India is currently looking for opportunities to import more coal from Indonesia as the Indonesian coal prices in the global market is declining due to pandemic. India’s plan is to replace coal import destinies to Indonesia and not increase coal imports from Indonesia.

India-Indonesia in coal sector

Indonesia is a major coal producer in Asia. In 2019 Indonesia exported 406,630,277 tons of coal. India also a 11th coal reserves in the world. Every year Indonesia produce 502,653,360 tons and 5th in the world.

Till September 2020 India has imported 128.7 million tonnes of coal from Australia. Of this, India imports 50.4 million tons of coal from Indonesia. This makes Indonesia the top supplier of coal to India in Southeast Asia.

But India imports lower quality coal from Indonesia. However Indonesian coal is less in Sulphur and produces less Ash and thus emits lesser pollutants

India’s other import destinations

India imports around 30 lakh tonnes per month of coal from South Africa . Australia is the second largest exporter of coal to India. Dadar places from where India imports coal are South Africa, Russia.

In 2019, India coal imports increased by 12.6 per cent and imported around 200 million tonnes of coal. Of this Indonesia alone accounted to 60% of the total imports.

Coal usage in India

India’s imported coal Majority is used for power generation. India import coking coal is mainly used in manufacturing of Steel.

India-China on Indonesian coal

After India, China largest importer of Indonesian coal due to its lesser quality. In China, Much of the coal bought from Indonesia is used for blending feedstock with domestic suppliers .

India’s Coal sector reforms

Indian Government lately is trying to increase the indigenous production of coal nationwide. In order to achieve this, it has introduced the following reforms

  • GoI has been allowed commercial mining
  • Entry norms for mining were liberalised
  • Coal gasification was incentivized
  • Coal bed Methane extraction rights is to be auctioned
  • GoI allows to the private companies for mining based on Revenue sharing.

5th India-Indonesia Joint Working Group 5th India-Indonesia Joint Working Group