Highlights

5th joint working group of India-Indonesia on coal was held on 5 Nov 2020. The Bilateral virtual meeting focus on coal sector.

During the Bilateral meeting, both countries discussed on Indian Coal Policy reforms under the Coal Mines (Nationalization) Act, 1973, commercial mining of coal in India and coking coal exploration.

Backdrop

Currently India is looking for opportunities to import more coal from Indonesia. This is because the coal prices in world market is declining at rapid rate. The plan is to replace coal imports destinies with Indonesia and not increase coal imports.

Why Choose Indonesia?

Recently Government of India proclaimed to increase its coal imports from Indonesia because, the Indonesian coal prices have fallen greatly in September 2020 due to the COVID-19 pandemic. The coal prices have been declining since March 2020.

  • Indonesia is the 3rd largest coal producer globally.
  • The Indonesian coal accounted to 40 per cent of world coal exports. China is one of the main coal customers of Indonesia.
  • Indonesia has been suffering from the economic slow down of China and India has so far failed to fill the gap.
  • This was because India is currently planning to increase its domestic coal production.

Current Scenario in India

In the world India holds 4th largest coal reserves. Still, India imports more than 250 million tonne of coal from other countries. Recently Government of India opened the coal mines to the private sector to increase the domestic coal production.

South Africa is the largest coal supplier to India after Australia. Till 2020, India imported 128.7 MT of coal from Indonesia. Of these, 50.4 MT were imported from Indonesia.

Coal Sector Reforms

Recently Government of India introduced several measures to increase domestic production. Domestic coal mines are to be offered to private companies based on revenue sharing. Also, commercial mining is being permitted, coal bed methane extraction rights have been auctioned and coal gasification has been incentivised.

Coal production in India

India have the 4th largest coal reserves in the world followed by Australia. Despite this, India imports more than 250 MT of coal from other countries. To decrease the dependency,  Recently Indian Government opened the coal mines to the private sector. This will help in boosting the domestic coal production.

Coal Import

Currently, South Africa is the largest coal supplier to India. After South Africa, Australia second largest coal supplier. As of now, India has imported 128.7 MT of coal out of which, 50.4 MT were imported from Indonesia. India Indonesia. Joint Working Group on Coal India Indonesia. Joint Working Group on Coal