Russia is interested in increasing coal exports to India, where demand is rising

Russia is interested in increasing coal exports to India, where demand is rising. Russian Deputy Prime Minister Alexander Novak said this today. China remains the biggest buyer of Russian coal, but Moscow said India could overtake China and become the top buyer as early as the beginning of the next decade. Reuters reports.

China plans to reduce coal consumption for power generation, while India is relying increasingly on coal. Electricity demand in India is rising rapidly, setting one record after another. At the beginning of this year, growth in electricity generation from coal-fired power plants exceeded growth in generation from renewable sources for the first time since at least 2019.

Coal production in India rose to a record 997.83 million tonnes in the last financial year, which ended in March this year, a year-on-year increase of 12 percent. More than 75 percent of the electricity generated in India in 2023 came from coal.

Last year, India imported 176 million tonnes of thermal coal, which is used in power plants. Russia exported 26.2 million tonnes of coal to India last year, compared with 20 million tonnes the year before, according to the Russian Ministry of Energy.

Russia is already India's largest oil supplier, after Moscow diversified its trade ties beyond Europe. Europe had been Russia's key trading partner, but trade between them was seriously disrupted by Russia's military invasion of Ukraine in February 2022, after which Western countries imposed a series of sanctions on Russia.

„Russian coal companies have substantial resources and are interested in expanding their presence in India's rapidly growing market,“ Novak told a meeting with journalists.

Despite close political and trade ties, India is cautious about sanctions imposed on Russia. In September, it said it would not buy liquefied natural gas (LNG) from Russia's Arctic LNG 2 project, which is subject to Western sanctions.