India’s coal ministry wants the country’s finance ministry to reduce the 5.1% import duty on thermal coal and to continue with the existing zero import duty on coking coal to facilitate larger imports by power and steel companies.
The demand for coking coal by India’s steel sector is expected to go up by 18-20% in 2010-11, however Coal India Ltd (CIL), which currently supplies 82% of the power sector’s thermal coal, will not be able to keep pace due to delays in developing new mining projects.
The Australian government wants the coal ministry to lobby for reducing the import duty on thermal coal and persist with the zero import duty on coking coal, since it eyeing an opportunity to supply more coal to India from Australia.
An Australian trade commission delegation, which recently came to India, presented a paper to the coal ministry saying reducing the import duty of thermal coal and keeping the zero import duty on coking coal intact would not only strengthen bilateral ties but would also enhance the availability of affordable inputs for two Indian infrastructure industry-power and steel.
An Australian trade commission delegation recently presented a paper to the coal ministry pointing out that coking coal imports, which were 12 million tonnes from Australia in 2006-07 would reach 18-20 mt in 2010-2011 and 25 mt in 2012, taking into account India’s increasing steel capacity.
The ministry estimatesthat import of coking coal and thermal coal would be a total 62.75mt by the end of 2009-2010, of which thermal coal would be around 40 mt. In 2008-09, India’s total thermal coal imports were 37.92 mt and coking coal 21.08 mt. Most of India’s thermal coal imports come from Indonesia however Australia is also looking for a slice of the thermal coal business.
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