In an effort to meet India’s rising fuel needs, Russia is interested in expanding its coal exports to that Asian nation. China continues to be Russia’s largest market for coal, but Moscow has warned that India could catch up by the beginning of the next decade as Beijing intends to reduce its reliance on coal for electricity production.
India has been depending more and more on coal to meet its record-breaking electricity needs; earlier this year, the country’s output of coal-fired power surpassed that of renewable energy for the first time since at least 2019. In 2023, power plants accounted for the majority of India’s 176 million thermal coal imports. Russia’s energy ministry reports that the country’s exports to India increased to 26.2 million tons last year from 20 million tons in 2022.
Due to a serious political impasse with the West over the situation in Ukraine, Russia is currently India’s top supplier of crude oil, thanks to the diversification of trade relations away from Europe, which was once Moscow’s primary trading partner. Russian companies that produce coal have a lot of resources and want to get more of a foothold in the rapidly developing Indian market.
India is hesitant to impose sanctions on Russia despite their strong commercial and political connections. It declared last month that it will not purchase LNG from Russia’s Arctic LNG 2 project, which is approved by Western nations.