April 23, 2026 - India’s ambitious plans to scale up its steel sector are set to increase its reliance on imported coal. The country aims to achieve a crude steel production capacity of 300 million tonnes per annum (MTPA) by 2030. A large share of this expansion, around 64% of the 382MTPA steel capacity under development, is anchored in coal-based blast furnace (BF) steelmaking route, which relies heavily on imported coking coal. With an estimated 770 kilograms of metallurgical (met) coal required to produce one tonne of crude steel, the 182MTPA of BF capacity that has been announced or is under construction would require an additional 140MTPA of met coal supply, almost double the current supply of 65MTPA, including imports and domestic washed met coal. 

In this briefing note, the term metallurgical (met) coal is defined in line with the International Energy Agency (IEA) to include coking coal, semi-soft coal, and pulverised coal injection (PCI) coal. However, the term ‘coking coal’ is used where referring to Indian government data, as official statistics are reported in these terms and it represents a key subset of metallurgical coal used in BF steelmaking.

While India produces large volumes of raw coking coal each year, very little qualifies as metallurgical grade.  

According to the Ministry of Coal, in financial year (FY) 2024, washed coking coal supply stood at just about 5 million tonnes (Mt), with high ash content and sulphur levels in domestic reserves limiting usability for steelmaking. Hence, the country is currently dependent on imports for around 90% of its met coal requirements, which it is now seeking to reduce as part of its push for atmanirbharta, or self-reliance, in coal production. 

With this in mind, the Ministry of Coal’s ‘Action Plan FY2025-26’ sets out an ambitious agenda: A 100 new mines by FY2029–30, creating an additional 500MTPA of capacity. Within this plan, ‘Mission Coking Coal’ targets doubling domestic coking coal output to 140Mt by FY2029–30. Additionally, the Government of India has notified coking coal as a “critical and strategic” mineral. 

However, despite these efforts, India’s reliance on imported met coal is expected to remain high if it remains committed to increasing steel production via the BF route. Imports reached 59Mt in the January–November 2025 period, up 10.6% year-on-year, and are projected to increase to around 94Mt in 2026 and 149Mt by 2035, according to S&P Global estimates.

While imports decreased slightly from 58Mt in FY2024 to 57Mt in FY2025, they reached 55Mt in FY2026 (April–January), compared to 48Mt in the same period last year (up 14.6% year-on-year). Further, S&P Global expects India’s overall met coal imports to increase from 94Mt in 2026 to 149Mt by 2035.

As shown in Figure 1, Australia has historically dominated India’s coking coal imports, supplying about 72% in FY2021. Its share has declined in recent years, to around 43% in FY2025, as India diversified its suppliers to reduce the risk of over-reliance on one country. In this period, the US has emerged as the second-largest supplier, increasing its share from about 8% in FY2021 to roughly 15% in FY2025. 

A December 2025 report by the Institute for Energy Economics and Financial Analysis (IEEFA) had flagged this growing risk. India’s dependence on imported met coal, which is set to only rise further, creates growing energy security risks. With most supply still sourced from Australia, Indian steelmakers remain exposed to financial, legal, regulatory and climate-related risks, increasing the likelihood of future supply disruptions. India could also face supply shortages in the longer term. In March 2026, the government of the state of New South Wales — which primarily exports thermal coal but also supplies met coal — announced it will no longer approve new greenfield coal mines. In addition, Queensland, one of the world’s largest met coal hubs, is increasingly prone to climate risks such as flooding and extreme rainfall, which disrupt exports and raise prices.

While diversification to other countries, such as the US, may appear to reduce energy security risks, the global met coal market remains highly interconnected and strongly influenced by Australia, which accounts for almost half of the global seaborne exports. Hence, it is essential for Indian policymakers and industry to understand how supply disruptions in Australia will drive the global price movement for met coal which could expose Indian steelmakers to volatile prices even as imports from alternative suppliers increase.