India-Indonesia 5th Joint Working Group on Coal held virtually

On November 5, 2020, the India-Indonesia fifth joint working group on coal was held. The meeting of the working group was held through video conference.

Key Highlights

During the meeting, the countries discussed on Indian Coal Policy reforms, commercial mining of coal in India and coking coal exploration.

Background

India is currently looking for opportunities to import more coal from Indonesia. This is because the coal prices in world market is declining at rapid rate. The plan is to replace coal imports destinies with Indonesia and not increase coal imports.

Why Indonesia?

India is to increase its coal imports from Indonesia because, the Indonesian coal prices have fallen greatly in September 2020 due to the pandemic. The prices have been declining since March 2020.

Indonesia is the third largest coal producer in the world. The Indonesian coal accounted to 40% of world coal exports. China is one of the main coal customers of Indonesia. Indonesia has been suffering from the economic slow down of China and India has so far failed to fill the gap. This was because India is currently planning to increase its domestic coal production.

Current Scenario in India

India holds fourth largest coal reserves in the world. Still, India imports more than 250 million tonnes of coal from other countries. The GoI recently opened the coal mines to the private sector to increase the domestic production.

South Africa is the largest coal supplier to India followed by Australia. Till 2020, India imported 128.7 million tonnes of coal from Indonesia. OF these, 50.4 million tonnes were imported from Indonesia.

Coal Sector Reforms

The Indian Government recently introduced several measures to increase domestic coal production. The coal mines are to be offered to private companies based on revenue sharing. Also, commercial mining is being permitted, coal bed methane extraction rights have been auctioned and coal gasification has been incentivised.

Month: Current Affairs - November, 2020