The growth was primarily driven by flexible pricing and the availability of high-quality coal from Russian exporters

India increased its imports of Russian thermal coal to a two-year high of 1.3 million tons in May, business daily Kommersant reported on Friday. 

The growth was primarily driven by flexible pricing and high-quality coal from Russian exporters, the report said, adding that Russia now accounts for 7.5% of India's coal imports. India, which imported 9.8 million tons of Indonesian coal in May, is now looking to increase its imports of higher-grade Russian coal.

The South Asian nation's total thermal coal imports rose by 10% in May to 17.4 million tons, the highest level since June 2024, Kommersant reported, citing data from BigMint. 

Favorable market conditions have prompted India to reduce its imports of lower-calorific-value Indonesian coal in favour of higher-grade Russian coal, which is offered at competitive prices, Nariman Taiketayev, Director of the Corporate Ratings Group at National Credit Ratings told the daily. 

Russian suppliers are also generally more amenable to flexible pricing and India's future demand for coal will depend on a combination of price dynamics and weather-related factors, he added. Evgeny Grachev, director of the Russian Centre for Price Indices, believes that Russian coal exporters most likely increased volumes of exports to India within the bounds of existing contracts.

He told Kommersant that the early onset of the rainy season will increase hydropower generation in India and "put pressure on thermal generation and coal consumption." India, which is dependent on coal for 70% of its electricity needs, announced a record coal production of 1.04 billion tons in March. Coal Minister G. Kishan Reddy has said that production should reach about 1.53 billion tons by 2030.