Between 1997 to 1998, unsystematic dumping of inexpensive coal by China led to a scenario, which intimidated the met coal industry in India. The anti-dumping duty in 1998 allowed the domestic industry to grow to some extent and India became partially self-sufficient instead of being dependent on China.
Once again, China has started dumping. In 2004, China had put an export duty that was increased from 5% to 15% and subsequently raised to 40% in 2008. In 2013, the export duty was brought down to zero. After that, Chinese met coal started flooding the Indian market. The cheap imports have increased by more than 5 times in last few years.
In India, the steel sector is already the 2nd largest consumer of coal accounting for approx. 8% of coal consumption followed by cement which consumes 5% of coal. Electricity generation has the largest share of nearly 64% of coal. In November, coal import was reduced by 16% to 14 million tonne and is expected to reduce this month due to factors, including demonetization and higher prices.
India imports met coal mainly from Australia and South Africa. Although the country has more than 300 billion tonnes of coal reserves, met. Coal constitutes only 10% of the total amount.
ICC stated: In 2015, the steel industry consumed nearly 66 million tonne of coal, and the consumption increased nearly 3 times between the financial year 2006 and financial year 2015. The imported coal accounted for nearly 2/3rd of the overall coal consumption by the Indian steel industry.
Met coal import to India is expected to increase in the next fiscal as demand increases. The domestic steel producers are likely to need approx. 96 million tonne of met coal by the financial year 2020, with the crude steel capacity likely to go up to 173 million tonne in the next four years.