India’s Steel Growth May Drive 6 Billion Tonne Coal Imports

India’s planned steel capacity expansion could necessitate cumulative coking coal imports approaching 6 billion tonnes over the coming decades, potentially generating an import bill nearing $1 trillion, according to recent industry assessments.

As India targets 300 million tonnes per annum of crude steel capacity by 2030, approximately 64 per cent of the 382 MTPA capacity under development relies on coal-intensive blast furnace technology. At an average requirement of 770 kilograms of metallurgical coal per tonne of steel, the planned blast furnace capacity alone could require an additional 140 MTPA of coal, nearly doubling current supply levels.

Import Dependency and Projections

India’s steel sector currently imports 90 per cent of its metallurgical coal requirements, as domestic coking coal contains high ash and sulphur content unsuitable for steelmaking. Metallurgical coal imports rose 9.4 per cent year-on-year in 2025 to over 83.1 million tonnes, and are projected to reach 149 million tonnes by 2035 from about 94 million tonnes in 2026, according to S&P Global estimates.

Coking coal demand is expected to increase sharply from 87 million tonnes in FY25 to 135 million tonnes by 2030, driven by steel industry expansion under the National Steel Policy. The blast furnace-basic oxygen furnace route accounts for approximately 65 per cent of installed capacity and consumes 95 per cent of India’s total coking coal demand.

Green Steel Alternative

Industry experts suggest that India’s abundant renewable energy resources provide a foundation for domestic green hydrogen and green steel production, where hydrogen replaces coking coal in iron-making, potentially helping the country avoid the trillion-dollar import burden. However, despite diversification efforts, analysts warn that India remains exposed to global price shocks, climate disruptions, and freight constraints even with growing US and alternative supplies.