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PLANS AFOOT FOR INDIA’S 1ST COAL EXCHANGE

Focus: GS-III Indian Economy, Industry and Infrastructure

Why in news?

India has taken a step towards completely throwing open the Coal sector to market forces as the country gears up for commercial coal mining auctions, which will increase the number of sellers of coal.

Details of the Proposal and Impact

  • As per the proposal, entire coal produced in the country will be traded on a ‘Coal Exchange,’ an online platform where pricing is determined transparently through demand and supply.
  • The exchange is being thought out on the lines of commodity exchanges, power bourses or the proposed gas exchange.
  • This could mean the end of new Fuel Supply Agreements (FSA) regime of Coal India where the state-run miner signs contracts for coal supply with consumers.
  • Coal blocks have also been allotted to state PSUs for sale of coal.
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Reducing Dependence on Imports

  • The country’s coal import dropped by 20% in May 2020, industry data showed.
  • The government is planning to bring the country’s ‘avoidable coal imports’ to zero by 2023-24.
  • Demand for coal import is expected to remain subdued in the short-term given the high coal stock levels in pithead and power plants

India’s Coal Imports

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  • Coal is among the top five commodities imported by India, the world’s largest consumer, importer and producer of the fuel.
  • India imported 51.33 million tonnes of coking coal in 2019, down from 51.63 million tonnes in 2018, the data showed.
  • Import Quantity Of Coal 283%
  • Imports of thermal coal — mainly used for power generation — jumped 12.6% to 197.84 million tonnes in 2019.
  • However, imports of coking coal — used mainly in the manufacturing of steel — fell marginally, following two straight years of increase, government data showed.

-Source: Economic TimesToggle panel: Yoast SEO

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