Because Western countries have imposed a coal embargo on the Kremlin, Russian exporters are luring other countries with discounts. In India they find a grateful buyer. Business with the raw material in both countries has never been better.
In July, despite Western sanctions, Russia became India’s third-largest supplier of coal. India’s coal imports grew by more than a fifth from June to a record 2.06 million tons, according to data from Indian consultancy Coalmint.
Historically, Russia has been India’s sixth largest supplier of coal, behind Indonesia, South Africa, Australia and the US, with Mozambique and Colombia alternating among the top five countries. Because of the Ukraine war, the European Union and Japan have imposed a coal embargo on Russia. However, Russia had shown itself unimpressed and referred to great demand worldwide.
India believes that the domestic central bank’s recent approval for payments for commodities in the national currency, the rupee, will significantly boost bilateral trade with Russia. Since Russia invaded Ukraine, imports from Russia have increased almost fivefold to more than $15 billion.
India is the second largest coal producer, importer and consumer in the world. In the past, the South Asian country has mainly imported coking coal – which is mainly used in the steel industry – from Russia. Australia is the other important supplier here.
However, the deep discounts that Russian suppliers have offered Indian customers in recent months have created an incentive to buy more thermal coal. This is mainly used for power generation. Imports of thermal coal from Russia rose 70.3 percent in July from June to a record 1.29 million tons, while imports of coking coal grew by more than two-thirds to over 280,000 tons.
