Is it true that like crude oil, India is also importing a lot of coal from Russia?

In the last couple of months there has been a spike in the import of oil from Russia. Last year, Russia accounted for just about 1% of India’s total oil imports. This year, in May 2022 they accounted for 18% of total oil imports into India and have become the second largest contributor and are the second largest supplier of oil to India after Iraq. In the process Russia got the better of Saudi Arabia as India’s second largest trading partner. Now that same story is also playing out in coal.

India's purchase of Russian coal have gone up sharply in recent weeks notwithstanding the global sanctions on Moscow. Like in the case of oil, the traders are also offering hefty discounts of up to 30% in coal imports from Russia. This was despite the stringent sanctions imposed by the Western countries. Russia is offering a much cheaper alternative to coal as compared to Australia and Indonesia due to the discounts being offered. Even the EU has imposed rather sweeping sanctions on coal imports, despite protests from Ukraine.

The US officials have told India that while there was no ban on energy imports from Russia, but asked India to avoid any rapid acceleration of imports from Russia. However, India has in the past few days decided to absolutely go ahead and import more of oil and coal from Russia to use the lower prices to check local inflation. As European coal importers shun Russian coal, Indian businesses are lapping up that coal in huge quantities at a discount. India’s coal imports in last 20 days saw a 6-fold increase in coal imports.

Not only is Russia giving hefty discounts to reduce their stock, but they are also offering liberal credit terms and accepting payments in currencies like Indian rupee. That saves a lot of foreign exchange pressure on the Indian economy. For Indian utilities and cement makers, this cheap coal has come as a blessing in disguise. Due to buying Russian coal, the average cost for India is down nearly 50%, so it is just too hard to resist. Major coal orders in India came from cement and steel companies.