Indian Coal Imports from Russia Highest in Two Years in May: Report

New Delhi, June 27, 2025 — India’s coal imports from Russia surged to a two-year high in May 2025, reflecting a broader trend of increased energy cooperation between the two nations despite global geopolitical uncertainties and supply chain recalibrations. A report by global trade analytics firm Kpler revealed that India imported nearly 2.3 million metric tonnes of coal from Russia last month, the highest since May 2023.

This spike represents a significant shift in India’s sourcing strategy amid growing power demand and price competitiveness of Russian coal in the international markets. The uptick also aligns with India’s continued emphasis on ensuring energy security, especially during the summer months when electricity consumption typically peaks.

Rising Imports: A Strategic Recalibration

India’s coal imports from Russia have steadily increased since early 2024, but the May figures mark a sharp acceleration. According to Kpler data, shipments rose nearly 45% month-on-month compared to April 2025 and were more than double the volumes imported in May 2024.

The majority of these imports were thermal coal, used primarily for power generation, while smaller volumes of metallurgical coal supported the country’s robust steel production sector.

“Russian coal is currently available at a discount of 8-10% compared to Australian and South African grades, which has significantly driven Indian buyers toward Russian suppliers,” said Rajiv Agarwal, Energy Analyst at India Ratings & Research. “Coupled with logistical improvements and stronger rupee-to-rouble payment mechanisms, the trend is likely to continue in the short term.”

India’s Dependence on Coal Still Intact

Despite growing investments in renewable energy, coal continues to dominate India’s power generation mix. According to the Ministry of Power, coal accounted for nearly 72% of electricity generation in FY2024-25.

India’s domestic coal production, led by state-run Coal India Ltd, has been on the rise. Yet, local output has not always kept pace with demand spikes, particularly during summer and monsoon seasons when transportation and logistics bottlenecks tend to surface.

“Importing coal becomes inevitable when inland supply cannot meet real-time demand,” noted Meenakshi Mehra, a power sector economist with the Observer Research Foundation. “Russia has filled a vital gap, especially as global trade patterns realign post-pandemic and amid lingering geopolitical realignments.”

Geopolitical Considerations and Western Sanctions

Russia’s growing presence in India’s coal trade comes despite ongoing Western sanctions following the Ukraine conflict. While energy imports like oil and gas from Russia have garnered global scrutiny, coal imports have largely escaped such attention.

Indian importers have increasingly settled transactions in rupees, Chinese yuan, or dirhams to bypass dollar-linked banking restrictions, enabling a smoother flow of commodities like coal.

“India’s position has been clear—energy security is non-negotiable,” said Anupama Singh, Senior Fellow at the Centre for Energy Policy Studies. “As long as the coal meets environmental compliance and cost-effectiveness, India will remain open to all sourcing options.”

Ports and Logistics: Scaling Up Infrastructure

Major Indian ports such as Paradip, Mundra, and Krishnapatnam handled bulk of the coal shipments from Russia in May. Industry sources indicate that infrastructure upgrades and streamlined customs processes have played a key role in accommodating the increased volumes.

Shipping companies have also benefited from shorter waiting times and improved cargo handling technologies, helping to reduce the turnaround time for Russian vessels.

Investor Outlook and Sector Implications

The resurgence in coal imports from Russia may influence several listed entities on Indian stock exchanges. Companies in the power generation, logistics, and shipping sectors stand to benefit, particularly those with exposure to imported coal usage.

Shares of Adani Power, JSW Energy, and Tata Power have all shown increased investor interest in recent weeks. Similarly, ports operators like Adani Ports & SEZ and Gujarat Pipavav Port may see long-term logistical benefits from the growing India-Russia coal corridor.

For commodity traders and investors, however, there are risks. “Any resurgence in global sanctions enforcement or shifts in global coal pricing could impact the arbitrage opportunity Indian firms are enjoying today,” warned Manoj Thakur, Director at Global Resource Partners.

Balancing Coal with Clean Energy Commitments

The recent surge in coal imports also raises questions about India’s climate goals. Under its Nationally Determined Contributions (NDCs) to the Paris Agreement, India has pledged to reduce the emissions intensity of its GDP by 45% by 2030.

Experts say the current surge is unlikely to derail clean energy goals but may signal the need for more aggressive investments in storage, grid upgrades, and flexible power sources.

“Coal will remain a part of India’s energy mix in the medium term,” said Dr. Kavita Sharma, climate policy consultant with TERI. “The key is to ensure that every additional rupee spent on fossil fuel-based imports is matched by strategic investments in renewables.”

India’s record coal imports from Russia in May 2025 reflect a blend of economic pragmatism, geopolitical balancing, and infrastructure optimization. While the trend supports near-term energy stability and cost efficiency, it also underscores the continuing complexity of India’s transition toward a greener energy future.

As global markets evolve and new alliances are forged, India’s ability to navigate energy security, pricing dynamics, and environmental responsibility will shape the country’s strategic positioning in the decade ahead.