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India and Russia had last year signed a memorandum of understanding for a strategic partnership in mining and steel, with a special focus on coking coal.
The conflict in Ukraine can affect implementation of this pact and also India’s coking coal imports from Russia. Because the developed world is exploring the option of further economic sanctions on countries pursuing economic ties with Russia.
What is the magnitude of coking coal import in India?
India’s coking coal imports have risen from about 30 million tonnes to over 50 million tonnes in the last decade.
Coking coal is one of the most critical inputs for the steel Industry that accounts for 40% of the total cost of production of steel. Currently, most steel producers in India are import-dependent for coking coal.
What are the countries on which India is dependent on for coking coal?
India imports most of its coking coal from Australia currently. India is also trying to diversify its supplies through negotiations with suppliers in Brazil and a few central Asian countries.
What will be the effect of the Ukrainian crisis on India’s coking coal import?
If the Ukraine crisis affects the pact with Russia it will negatively affect India’s goal of diversifying its supplies.
Both Russia and Ukraine are manufacturers and exporters of steel in addition to being suppliers of raw materials including coking coal and natural gas. The unfolding Russia-Ukraine crisis will impact supply-demand dynamics and overall global economy.
Though India possesses large deposits of coking coal in the Jharia region of Jharkhand, most of it remains unexplored due to continuous fire in the mining areas. In this scenario Russian supplies of coking coal can prevent India from frequent fluctuation of prices of this key raw material.
Source– This post is based on the article “India seeks alternative to coking coal imports” published in Live Mint on 26th Feb 2022.
