‘States urged to step up coal imports for three years’

Power Ministry said to have arrived at decision as private sector is expected to take at least till 2025 to produce significant output

India has urged its States to step up coal imports for the next three years to build up inventories and satisfy demand, four sources told Reuters, a move set to benefit global prices of the fuel, already running high because of war in Ukraine.

The decision to boost imports underscores the severity of India's fuel crisis as coal inventories are at the lowest pre-summer levels in at least nine years and electricity demand is seen rising at the fastest pace in almost four decades.

India, the world's second-largest coal importer, could drive up global demand until 2025, as Power Minister R.K. Singh has set a longer timeline for a federal push to increase imports that had until now been seen as a temporary measure.

"The States were asked to continue importing because the private sector will take till at least early 2025 to produce significant output," said a Power Ministry official who attended Mr. Singh's meeting with State officials on Tuesday.

In addition, the state-run rail network suffers a persistent shortage of trains to move domestic coal, the official added.

The sources, two State officials who attended the meeting and two Power Ministry officials, declined to be identified, as the matter is private.

At the meeting, States were asked to sign long-term import deals to ensure supply and lower prices, as well as buy rail wagons to resolve the logistics problems, said another Ministry official who was briefed on it, but did not attend.