Indian coal imports from Russia highest in two years in May: Report

India, one of the key buyers of Russian thermal coal, increased its imports from Russia in May to the highest level in two years, business daily Kommersant reported on Friday.

The Russian thermal coal deliveries to India rose by 52 per cent in May 2025 compared to April, reaching a two-year high of 1.3 million metric tons, reported Kommersant quoting a business review by the Russian Centre for Price Indices (CCI).

Records reveal since June 2023, monthly exports from Russia have not exceeded 1 million tons.

Analysts interviewed by the Daily attribute this trend to the flexible pricing strategies adopted by Russian coal exporters, as well as the quality of the fuel itself.

While a significant increase in Russia's market share in India is unlikely due to rising domestic production and the high cost of logistics.

However, maintaining current shipment levels is entirely feasible, it said, voicing the opinion of experts.

India's total thermal coal imports in May increased seasonally by 10 per cent month-over-month to 17.4 million tons, the highest level since June 2024, the report said citing data from BigMint.

Russia accounted for approximately 7.5 per cent of India's total coal purchases. Indonesia remained the country's top supplier, expanding shipments by 16 per cent over the previous month to 9.8 million tons.

Indian coal imports from South Africa remained at April level of 3.4 million tons, while rose by 43 per cent from the US to 2 million metric tons.

Russian coal exporters most likely increased volumes within the bounds of existing contracts, Director of the RF Centre for Price Indices (CCI) Evgeny Grachev believes.

In India, the monsoon season began earlier this year, which means hydropower generation will put pressure on thermal generation and coal consumption, Grachev noted.

According to Nariman Taiketayev, Director of the Corporate Ratings Group at National Credit Ratings (NCR), favourable market conditions prompted India to reduce its imports of lower-calorific-value Indonesian coal in favour of higher-grade Russian coal, which is offered at competitive prices.

Russian suppliers, he added, are generally more amenable to flexible pricing. He also emphasised that India's future demand for coal will depend on a combination of price dynamics and weather-related factors.

However, a stronger rouble and volatility in Iran could dampen the spirit of Russian coal exporters, who were already hit by uncertainty during the 12-day Israel-Iran war.