India turns to US for coking coal as Australia's dominance wanes

The shift in sourcing predates the India-US trade framework and reflects a structural diversification strategy, even as coking coal is designated a critical mineral to boost domestic output

India’s coking coal imports are rapidly shifting towards the United States, away from Australia, which has traditionally been the largest supplier. The shift was underway well before the latest announcement of the India-US trade framework and underscores a structural change in India’s energy sourcing strategy.

 

A Business Standard analysis of fresh commerce ministry data shows that while Australia remains the single largest supplier, its dominance has weakened sharply. Its share in India’s coking coal imports declined to 43 per cent in FY25 from 69 per cent in FY20 in volume terms. Australia exported 35.92 million tonnes (mt) of coking coal in FY20 which fell to 24.54 mt in FY25.

 

Over the same period, the US has emerged as a major supplier, with its share rising from 7.3 per cent to over 15 per cent in FY25, as US shipments to India doubled over five years.

 

The US exported 3.77 mt of coking coal in FY20, which rose to 8.47 mt in FY25. During the same period, Russia’s share also rose to 7.75 mt from 1.1 mt.

 

The shift has taken place against the backdrop of India’s continued dependence on imported coking coal. The country holds an estimated 37 billion tonnes of coking coal resources, primarily in Jharkhand, with additional reserves in Madhya Pradesh, West Bengal, and Chhattisgarh.

 

However, around 95 per cent of the steel sector’s coking coal requirement is met through imports, which rose to 57.07 mt in FY25 from 51.83 mt in FY20.

 

India’s latest intent to purchase coking coal from the US under the proposed bilateral trade framework comes against the backdrop of this diversification strategy, which has been in the works for some time. The India-US joint statement released on Saturday said India intends to purchase $500 billion worth of US products over five years, including energy products, precious metals, and coking coal.

 

The sourcing shift gathered pace even as the government sought to reduce vulnerability to imported coking coal. The coal ministry last month notified coking coal as a critical mineral, signalling the need to boost domestic production and secure supplies.

 

Analysts said the diversification reflects a deliberate effort by Indian buyers to reduce risks associated with supply concentration. “The shift reflects a conscious diversification strategy to reduce exposure to supply disruptions and price volatility linked to Australian coking coal exports,” said Rajib Maitra, partner and sector leader at Deloitte South Asia.

 

Relying on a single geography exposes steelmakers to supply shocks caused by cyclones, mine disruptions, and periods of market tightness, which directly affect landed costs.

 

Amit Bhargava, National Leader, Metals and Mining, KPMG in India, said the focus on securing coking coal was significant given India’s steelmaking trajectory. “India’s steel capacity expansion is of enormous scale globally. The blast furnace route, which is the dominant pathway, would also have a significant role in the expansion, which makes coking coal critical,” he said.

 

He added that the India-US interim trade agreement framework signals the intent to broaden sourcing geographies. “The US has always had the potential to supply coking coal, and the framework creates a clearer intent to develop that supply. This would help in blending and overall cost optimisation for Indian players,” he said.